US economy grew at solid 3.1% rate in first quarter
Source: Associated Press
By MARTIN CRUTSINGER
35 minutes ago
WASHINGTON (AP) — The U.S. economy grew at a healthy 3.1% rate in the first three months of this year, but signs are mounting that growth has slowed sharply in the current quarter amid slower global growth and a confidence-shaking trade battle between the United States and China.
The gain in the gross domestic product, the broadest measure of economic health, was unchanged from an estimate made a month ago, the Commerce Department reported Thursday. However, the components of growth shifted slightly with stronger business investment and consumer spending slowing more than previously estimated.
Economists believe growth has slowed sharply in the current April-June quarter to around 2%. They expect similar meager gains for the rest of the year, a forecast that runs counter to the Trump administration’s expectations for strong growth above 3%.
The 3.1% growth in the first quarter marked a rebound from a 2.2% growth rate in the fourth quarter of last year. But it was slower than a sizzling increase of 4.2% in the second quarter and a solid increase of 3.4% in the third quarter last year. For the entire year, GDP grew 3.9%, the best annual gain since 2015.
Read more: https://apnews.com/7835067c2c574bbb8d400ec9c55ebf6d
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BEA 19—29
Gross Domestic Product, First Quarter 2019 (Third Estimate); Corporate Profits, First Quarter 2019 (Revised Estimate)
Real gross domestic product (GDP) increased at an annual rate of 3.1 percent in the first quarter of 2019 (table 1), according to the "third" estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2018, real GDP increased 2.2 percent.
The GDP estimate released today is based on more complete source data than were available for the "second" estimate issued last month. In the second estimate, the increase in real GDP was also 3.1 percent. Upward revisions to nonresidential fixed investment, exports, state and local government spending, and residential fixed investment were offset by downward revisions to personal consumption expenditures (PCE) and inventory investment and an upward revision to imports (see "Updates to GDP" on page 2).
Real gross domestic income (GDI) increased 1.0 percent in the first quarter, compared with an increase of 0.5 percent in the fourth quarter. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 2.1 percent in the first quarter, compared with an increase of 1.3 percent in the fourth quarter (table 1).
The increase in real GDP in the first quarter reflected positive contributions from exports, PCE, nonresidential fixed investment, private inventory investment, and state and local government spending that were slightly offset by a negative contribution from residential fixed investment. Imports, which are a subtraction in the calculation of GDP, decreased (table 2).
The acceleration in real GDP in the first quarter reflected an upturn in state and local government spending and accelerations in private inventory investment and in exports. These movements were partly offset by a deceleration in PCE. Imports decreased in the first quarter after increasing in the fourth (table 2).
Current–dollar GDP increased 3.8 percent, or $195.0 billion, in the first quarter to a level of $21.06 trillion. In the fourth quarter, current-dollar GDP increased 4.1 percent, or $206.9 billion (table 1 and table 3).
The price index for gross domestic purchases increased 0.8 percent in the first quarter, compared with an increase of 1.7 percent in the fourth quarter (table 4). The PCE price index increased 0.5 percent, compared with an increase of 1.5 percent. Excluding food and energy prices, the PCE price index increased 1.2 percent, compared with an increase of 1.8 percent.
Updates to GDP
The first-quarter percent change in real GDP was the same as previously estimated, reflecting upward revisions to nonresidential fixed investment, exports, state and local government spending, and residential fixed investment that were offset by downward revisions to PCE and inventory investment, and an upward revision to imports. For more information, see the Technical Note. A detailed "Key Source Data and Assumptions" file is also posted for each release. For information on updates to GDP, see the "Additional Information" section that follows.
Advance Estimate Second Estimate Third Estimate
(Percent change from preceding quarter)
Real GDP 3.2 3.1 3.1
Current-dollar GDP 3.8 3.6 3.8
Real GDI … 1.4 1.0
Average of Real GDP and Real GDI … 2.2 2.1
Gross domestic purchases price index 0.8 0.7 0.8
PCE price index 0.6 0.4 0.5
Upcoming Annual Update of the National Income and Product Accounts
The annual update of the national income and product accounts, covering the first quarter of 2014 through the first quarter of 2019, will be released along with the "advance" estimate of GDP for the second quarter of 2019 on July 26. For more information, see the Technical Note.
Corporate Profits (table 10)
Profits from current production (corporate profits with inventory valuation and capital consumption adjustments) decreased $59.3 billion in the first quarter, compared with a decrease of $9.7 billion in the fourth quarter.
Profits of domestic financial corporations increased $1.4 billion in the first quarter, in contrast to a decrease of $25.2 billion in the fourth quarter. Profits of domestic nonfinancial corporations decreased $68.1 billion, in contrast to an increase of $13.6 billion. Rest-of-the-world profits increased $7.4 billion, compared with an increase of $1.9 billion. In the first quarter, receipts increased $13.8 billion, and payments increased $6.4 billion.
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Next release, July 26, 2019 at 8:30 A.M. EDT
Gross Domestic Product, Second Quarter 2019 (Advance Estimate) and Annual Update
