United States: Q1 GDP Disappoints28 April, 2011, 21:35. Posted by Zarathustra
Tags: Economy, GDP, United States
The advanced report of the first quarter GDP disappoints. Real GDP grew in the first quarter by an annualised rate of 1.8%, lower than the expected of 2.0% and the 3.1% growth in the fourth quarter of 2011.
Growth in personal consumption slowed to 2.7% from 4.0% in the fourth quarter of last year. Government spending also contributed to the weakness, falling 5.2% in the first quarter vs. the 1.7% fall in the fourth quarter of last year (including 11.7% fall in defence spending). Imports increased by 4.4% vs 12.6% decrease, and exports increased by 4.9% vs. 8.6% increase in the fourth quarter of last year.
The slowdown was sort of expected, although it came in even worse than the forecast after being revised downward. The Fed yesterday also lowered its full-year forecast to reflect the weakness in the first quarter, although it views the weakness to be transitory.