US first quarter GDP figure revised downward from initial estimate

Wednesday 26 June 2013 18.08
US Federal Reserve chairman Ben Bernanke last week gave an upbeat assessment of the US economy
US Federal Reserve chairman Ben Bernanke last week gave an upbeat assessment of the US economy

US economic growth was more tepid than previously estimated in the first quarter.

Gross domestic product expanded at a 1.8% annual rate, the Commerce Department said in its final estimate today.

Output was previously reported to have risen at a 2.4% pace after a 0.4% stall speed in the fourth quarter.

Details of the report, which showed downward revisions to almost all growth categories, with the exception of home construction and government, could cast a shadow over the Federal Reserve's fairly upbeat assessment of the economy last week.

Details of the report, which showed downward revisions to almost all growth categories, with the exception of home construction and government, could cast a shadow over the Federal Reserve's fairly upbeat assessment of the economy last week.

Though the data is fairly backward looking, it comes as financial market conditions are tightening after Fed Chairman Ben Bernanke said last week the US central bank would likely begin to slow the pace of its bond-buying stimulus later this year and stop the programme in 2014.

Consumer spending, which accounts for more than two-thirds of US economic activity, increased at a 2.6% pace rather than 3.4%. The revision largely reflected weak outlays on health care services.

Consumer spending grew at a 1.8% rate in the fourth quarter of last year.

Exports, previously reported to have grown, actually contracted at a 1.1% pace in the first quarter, cutting 0.15 percentage points from GDP growth. That likely reflects a slowdown in the global economy.

Business spending barely grew, with investment on nonresidential structures declining more sharply than previously reported. The drop in spending on nonresidential structures was the first in two years.

The pace of inventory accumulation was revised marginally down, adding more than half a percentage point to GDP growth. Excluding inventories, GDP grew at a 1.2% rate, the slowest in two years.

Keywords: us gdp