United States: Third estimates revise Q1 growth further down
July 1, 2013
In the first quarter, GDP expanded at a seasonally adjusted annualised rate (saar) of 1.8%, according to the third estimate released by the Bureau of Economic Analysis (BEA) on 1 July. The print marked a further deterioration relative to both the 2.5% reading issued in the advance figure as well as the revised estimate of a 2.4% rise.
The revision was broad-based, as almost all of the categories experienced downwards adjustments. On the domestic side of the economy, private consumption deteriorated compared to the second estimate, rising 2.6% (second estimate: +3.4% quarter-on-quarter saar), while government spending was slightly revised to a 4.8% drop (second estimate: -4.9% qoq saar). Gross fixed investment rose 3.0% in the first quarter (second estimate: +4.1%) amid a sharp downward revision in non-residential investment.
On the external front, both exports and imports were revised downwards. Exports contracted 1.1% in the first quarter (second estimate: +0.8% qoq saar), while imports declined 0.4% (second estimate: +1.9% qoq saar). As a result, the external sector posted no contribution to overall growth.
New projections by the Federal Reserve show economic growth ranging between 2.3% and 2.6% in 2013 and accelerating to between 3.0% and 3.5% 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%.