June 26, 2013 Ed Dolan’s Econ BlogUS GDP Grows at 1.8 Percent Rate in Q1 2013 The third estimate from the Bureauof Economic Analysis showed USGDP growing at a 1.8 percent annualrate in the first quarter of 2013. That was a decrease of 0.6percentage points from the secondestimate, 2.4 percent, released lastmonth. The average revision from thesecond to third estimates,disregarding sign, is 0.2 percentagepoints
Expansion Resumes According to standard business cycleterminology, the recession phase of thebusiness cycle is the downwardmovement of GDP from its previouspeak The recovery phase is the upwardmovement from the trough (low point)of the recession and continues untilGDP again reaches its previous peak. Once GDP moves above its previouspeak, the expansion phase begins. The expansion resumed in Q1 2013after almost stalling in Q4 2012June 26, 2013 Ed Dolan’s Econ Blog
Sources of Growth by Sector Consumption contributed 1.83 percentagepoints to Q4 growth, including both goodsand services Investment contributed 0.96 percentagepoints. Fixed investment was lower than inQ4 while inventories grew faster Exports contributed decreased for thesecond consecutive quarter, partly offset bya decrease in imports (details on Slide 5) The government sector also made anegative contribution to growth (details onSlide 6)Contribution by sector to the1.8% GDP growth in Q1 2013Note: Imports are recorded in the nationalaccounts with a negative sign, so the +0.6percent shown here represents a decrease inimportsJune 26, 2013 Ed Dolan’s Econ Blog
Export Growth Turns Negative Exports have been a source ofstrength throughout the recovery, butthey are now falling as the globaleconomy slows US exports fell in Q1 for the secondconsecutive quarterJune 26, 2013 Ed Dolan’s Econ Blog
Fiscal Drag Continues The government contribution toGDP growth, as measured bygovernment consumptionexpenditure and gross investment,has been negative throughout mostof the recovery Government spending growthturned positive in Q3 2012, butnegative growth returned in Q4 andcontinued in Q1 2013 Economists refer to the negativeimpact on GDP of lower governmentspending as fiscal drag. Politicalgridlock over spending and taxes isexpected to lead to continued fiscaldrag throughout this yearJune 26, 2013 Ed Dolan’s Econ Blog
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