United States: Economic growth in Q1 revised slightly downwards
May 30, 2013
In the first quarter, GDP expanded at a seasonally adjusted annualised rate (saar) of 2.4%, according to the second estimate released by the Bureau of Economic Analysis (BEA) on 30 May. The print marked a slight deterioration relative to both the 2.5% reading issued in the advance estimate as well as market expectations, which had anticipated that growth would be unrevised. The first quarter reading continued to reflect a sharp increase in domestic demand, while the contribution from the external sector to overall growth was revised downwards.
On the domestic side of the economy, private consumption deteriorated slightly compared to the advance estimate, rising 1.7% (advance estimate: +1.8% quarter-on-quarter saar), while government spending dropped 4.9% in the first quarter (advance estimate: -4.1% qoq saar). Nevertheless, the revised Q1 reading still indicates that economic activity is recovering despite the start of the sequestration. Gross fixed investment rose 4.1% in the first quarter, unchanged from the advance estimate.
On the external front, both exports and imports were revised downwards compared to the advance estimate. According to the second estimate, exports rose 0.8% in the first quarter (advance estimate: +2.9% qoq saar), while imports increased 1.9% (advance estimate: +5.4% qoq saar). As a result, the external sector posted no contribution to overall growth.
The Federal Reserve expects economic growth to range between 2.0% and 3.0% in 2013 and to accelerate to between 2.6% and 3.0% in 2014. FocusEconomics Consensus Forecast panellists expect GDP to expand 1.9% in 2013, which is unchanged from last month's forecast. For 2014, the panel expects the economy to expand 2.7%.