BEA: Even the Weak GDP Growth We Previously Reported for Q1 Was Too Positive

Craig Bannister | May 30, 2024
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After initially reporting that first quarter growth of the nation’s Gross Domestic Product (GDP) was the lowest in seven quarters (and well below the 2.0% target), the U.S. Bureau of Economic Analysis (BEA) now says that GDP growth was even lower than previously estimated.

In a news release published Thursday, the BEA reports that real GDP growth for the first three months of the year was actually 1.3%, not the 1.6% increase that fell far short of analysts’ 2.5% expectations last month, when BEA released its the first estimate of economic growth.

According to the updated data, consumer spending was even lower than first reported and was the primary force driving the downward revision in first quarter GDP growth:

“Compared to the fourth quarter, the deceleration in real GDP in the first quarter primarily reflected decelerations in consumer spending, exports, and state and local government spending and a downturn in federal government spending.”

Additionally, the growth of imports, which are a subtraction from GDP, “accelerated,” the BEA reports in its update.

At 1.3%, the new estimate is more than two percentage points lower than the 3.4% increase in the fourth quarter of 2023. It’s also the lowest number since GDP shrank by 0.6% in the second quarter of 2022.

Other downward revisions in BEA’s latest estimate include:

  • The increase in the price index for gross domestic purchases was revised down from 3.1% to 3.0%.
  • The personal consumption expenditures (PCE) price index increase was revised down from 3.4% to 3.3%.
  • Excluding food and energy prices, the PCE price index increase was revised from 3.7% to 3.6%.

 

Real GDP

The BEA will release a third estimate of first quarter GDP on June 27, 2024, further updating the numbers published on Thursday.

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