- Prior estimate -0.3%
- GDP 2nd revision -0.2% versus -0.3% expected
- GDP deflator 3.7% versus 3.7% expected and 3.7% preliminary
- Core AC prices 3.4% versus 3.5% estimate and 3.5% preliminary
- PCE prices preliminary 3.6% versus 3.6% preliminary
- PCE ex food, energy and Housing 3.3% versus 3.4% preliminary
- PCE ex energy and housing 4.1% vs 4.2% preliminary
- Sales preliminary -2.9% versus -2.5% advanced release
- Consumer spending +1.2% versus 1.8% advanced release
The decrease in real GDP in the first quarter primarily reflected an increase in imports, which are a subtraction in the calculation of GDP, and a decrease in government spending. These movements were partly offset by increases in investment, consumer spending, and exports.
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Positive Contributions: Consumer spending grew modestly at 1.8% (down from 4.0% in Q4 2024), adding 1.2 percentage points to GDP. Business investment surged 9.8%, led by a 22.5% increase in equipment investment, particularly in information processing equipment (up 69.3%), contributing 1.0 percentage point to GDP. Inventory investment added 2.3 percentage points.
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Trade Impact: Exports grew by 1.8%, but the sharp rise in imports led to a net trade subtraction of 4.8 percentage points from GDP.
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Inflation: The Personal Consumption Expenditures (PCE) price index rose 3.6% annualized, up from 2.4% in Q4 2024, while core PCE inflation was 3.5%, signaling persistent inflationary pressure.
This article was written by Greg Michalowski at www.forexlive.com.
