Real GDP for the first quarter was revised up this morning, reflecting slightly higher growth in personal consumption, private investment, and government expenditures than previously estimated. The small first-quarter decline in overall GDP was driven by a number of factors including harsh winter weather and tepid foreign demand. However, the combination of consumption and investment—the most stable and persistent components of output—continued to rise at a robust year-over-year pace. This solid trend matches the strong pace of job growth and employment reduction observed over the last year. The President is working to build on these underlying trends by opening our exports to new markets with high-standards free trade agreements, boosting investment in infrastructure, and avoiding harmful budget cuts like the sequester.
FIVE KEY POINTS IN TODAY’S REPORT FROM THE BUREAU OF ECONOMIC ANALYSIS
1. Real gross domestic product (GDP) edged down 0.2 percent at an annual rate in the first quarter of 2015, according to the third estimate from the Bureau of Economic Analysis. This report reflects an upward revision of 0.5 percentage point to overall GDP growth. The slower first quarter follows a solid increase of 3.6 percent at an annual rate during the second half of 2014. Over the past four quarters, GDP rose 2.9 percent. First-quarter growth was likely affected by a number of transitory factors including unusually severe weather, the West Coast ports dispute, and various measurement issues. A decline in net exports was another important contributor to weak GDP growth. Indeed, net exports subtracted nearly 2 full percentage points from quarterly GDP growth. Furthermore, structures investment subtracted about 0.6 percentage point from GDP (see point 4), reflecting reduced oil drilling in the wake of last year’s decline in oil prices. Despite the decrease in GDP, real gross domestic income—an alternate measure of economic output—increased 1.9 percent at an annual rate in the first quarter.