GDP Growth Halved in 1st Quarter, Corporate Profits Suffer 3rd Straight Quarterly Decline 1st Time Since Obama Era

Craig Bannister | May 25, 2023
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The nation’s Gross Domestic Product rose 1.3% in the first quarter, half the rate of the previous quarter, as other key measures of the economy faltered, the U.S. Bureau of Economic Analysis (BEA) reported Thursday.

While revised up from 1.1%, the first-quarter, inflation-adjusted (“real”) GDP growth of 1.3% was half the 2.6% growth recorded in both the same period last year and the fourth quarter of 2022.

Adjusted pre-tax corporate profits fell at a 5.1% quarterly rate, more than twice the 2.0% decline the previous quarter. This marks the first time profits have fallen for three straight quarters since 2015, under the Obama Administration.

Real gross domestic income (GDI) decreased 2.3% in the first quarter, following a revised 3.3% decline in the fourth quarter of last year. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, decreased 0.5% in the first quarter, compared with a decrease of 0.4% in the fourth quarter.

The personal saving rate (personal saving as a percentage of disposable personal income) was 4.2% in the first quarter, a downward revision of 0.6 percentage point.

Inflation, as measured by the BEA’s Personal Consumption Expenditure (PCE) index, was 4.2% in the first quarter, an increase from the fourth quarter’s 3.7% rise. Excluding food and energy prices, the PCE price index increased 5.0%.

The business and economic reporting of is funded in part with a gift made in memory of Dr. Keith C. Wold.

Real Gross Dommestic Product