Global| Apr 28 2011U.S. GDP Growth Slows
by:Tom Moeller
|in:Economy in Brief
Summary
Real GDP grew 1.8% (SAAR) last quarter, the weakest growth since Q2'10. The Q1 figure roughly equaled Consensus expectations for 1.9% growth. Weakness in last quarter's GDP components was widespread. Slower growth in personal [...]
Real GDP grew 1.8% (SAAR) last quarter, the weakest growth since Q2'10. The Q1 figure roughly equaled Consensus expectations for 1.9% growth.
Weakness in last quarter's GDP components was widespread. Slower growth in personal consumption of 2.7% from Q4 led the easing, although it still exceeded that for all of last year. Notable was weaker growth in business fixed investment to 1.8%, down from last year's 5.7% advance. Continuing weak was the housing sector. Residential investment fell 4.1%, on a par with last year's decline. Finally, government spending declined at a 5.2% rate, the most for any quarter since 1983. Lower defense purchases caused federal spending to fall at a 7.9% rate while budget shortfalls pulled state & local spending down at a 3.3% rate, the most in a year.
Deterioration in the foreign trade deficit subtracted 0.1 percentage points from last quarter's GDP gain, though export growth of 5.0% (7.3% y/y) exceeded the 4.4% rise (9.2% y/y) in imports. Quicker inventory accumulation added 0.9 percentage points to GDP growth.
Price inflation as measured by the chained GDP price index quickened to 1.9%, nearly double last year's gain. The price index for domestic final demand jumped 3.8% (1.6% y/y) and the price index for final sales rose 1.9% (1.5% y/y). The GDP figures are available in Haver's USECON and USNA databases and the expectations number is in AS1REPNA.
| Chained 2005 $, % AR | Q1'11 | Q4'10 | Q3'10 | Q1'11 Y/Y |
2010 | 2009 | 2008 |
|---|---|---|---|---|---|---|---|
| GDP | 1.8 | 3.1 | 2.6 | 2.3 | 2.9 | -2.6 | -0.0 |
| Inventory Effect | 0.9 | -3.4 | 1.6 | 0.1 | 1.5 | -0.5 | -0.5 |
| Final Sales | 0.8 | 6.7 | 0.9 | 2.3 | 1.4 | -2.1 | 0.5 |
| Foreign Trade Effect | -0.1 | 3.3 | -1.7 | -0.4 | -0.5 | 1.0 | -1.1 |
| Domestic Final Demand | 0.9 | 3.2 | 2.6 | 2.7 | 1.8 | -3.1 | -0.6 |
| Demand Components | |||||||
| Personal Consumption | 2.7 | 4.0 | 2.4 | 2.8 | 1.8 | -1.2 | -0.3 |
| Business Fixed Investment | 1.8 | 7.7 | 10.0 | 9.0 | 5.7 | -17.1 | 0.3 |
| Residential Investment | -4.1 | 3.3 | -27.3 | -2.5 | -3.0 | -22.9 | -24.0 |
| Government Spending | -5.2 | -1.7 | 3.9 | 0.2 | 1.0 | 1.6 | 2.8 |
| Prices | |||||||
| Chained GDP Price Index | 1.9 | 0.4 | 2.1 | 1.6 | 1.0 | 0.9 | 2.2 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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