United States: GDP lower than expected in Q1
April 27, 2012
The economy expanded at a seasonally adjusted annualised rate (saar) of 2.2% in the first quarter, according to the advance estimate released by the Bureau of Economic Analysis (BEA) on 27 April. The reading was below both the 3.0% expansion recorded in the previous quarter as well as market expectations, which had anticipated the economy would grow 2.5%. The deceleration over the previous quarter was caused by softer growth in fixed investment, as well as by a lower stockpiling of inventories. Fixed investment grew at a 1.4% annualised rate, down from the 4.3% expansion recorded in the final quarter of 2011, mainly due to a decline in non-residential fixed investment (Q4 2011: +2.8% saar; Q1 2012: -2.1% saar). In addition, inventories added only 0.6 percentage points to overall growth, well down from the 1.9 percentage points added in Q4 2011. On a positive note, growth in private consumption stepped up to 2.9% in the first quarter, up from the 2.1% expansion observed in Q4 2011, and marking the fastest pace recorded in over a year. Finally, government spending continued to contract, declining at a 3.0% annualised rate (Q4 2011: -4.4% saar) On the external front, exports accelerated from a 4.3% expansion in the fourth quarter to a 5.4% rise in Q1. Imports improved at a similar pace, increasing 4.3% (Q4 2011: +3.8% saar). As a result, the external sector's net contribution to overall growth remained virtually unchanged from minus 0.1 percentage points in the fourth quarter to 0.0 percentage points in the first.