BEA Leaves Q1 GDP Growth Unchanged at 1.8%

May 26, 2011

First quarter GDP grew at the same 1.8% rate that was initially reported, according to the "second" estimate released by the Bureau of Economic Analysis today.The lower growth rate was driven by a sharp increase in imports, a deceleration in PCE, a larger decrease in spending by the federal government, and a deceleration in nonresidential fixed investment, and was offset, partly, by a large increase in private inventory investment.Economists had been expecting a revision in the second estimate, to 2.2% for the three months ended March 31, 2011.Surprisingly, real consumer spending was revised down for the quarter, to a 2.2% annualized rate from the initial 2.7% estimate.The weaker spending by consumers was offset by positive revisions to business investment and inventories.Real disposable income growth for the quarter was revised down to a 0.8% annual rate, from the initially reported 2.9%.