Despite tax cuts expected to boost consumer spending, the Advance GDP report shows consumer spending weakened.

The deceleration in real GDP growth in the first quarter reflected decelerations in PCE, residential fixed investment, exports, and state and local government spending. These movements were partly offset by an upturn in private inventory investment. Imports, which are a subtraction in the calculation of GDP, decelerated.

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Price Deflators

  • The GDP price deflator for the report was 2.0%.
  • The price index for gross domestic purchases increased 2.8 percent in the first quarter, compared with an increase of 2.5 percent in the fourth quarter.
  • The PCE price index increased 2.7 percent, the same increase as in the fourth quarter.
  • Excluding food and energy prices, the PCE price index increased 2.5 percent, compared with an increase of 1.9 percent in the fourth quarter.

Personal Consumption Expenditures


Real Personal Consumption Expenditures (PCE) rose 1.1%, the weakest since the second quarter of 2013. Spending on goods declined 1.1%.

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Real Final sales, the bottom-line measure of the economy was 1.9%.

Key Contributions to GDP

  • PCE: .73
  • Goods (a subset of PCE): -0.24
  • Services (a subset of PCE): 0.97
  • Fixed Investment: 0.76
  • Residential (a subset of fixed investment): 0.0
  • Change in Private Inventories: 0.43
  • Exports: 0.59
  • Imports: -0.39
  • Government Expenditures: 0.20

All in all, there were few surprises in the report. One standout is net exports at 0.20. GDPNow had exports at 0.55 and imports at -0.85, a net of -0.30.

Mike "Mish" Shedlock

First Quarter GDP Second Estimate 1.2 Percent: Mish vs. Consensus

This morning, the BEA revised its estimate of first-quarter GDP to 1.2% from 0.7%. The Econoday consensus estimate was 0.8%, in a range of 0.7% to 1.0%.

Consumer Spending Propping up GDP: How Long Can This Go On?

The second estimate of GDP, released this morning was an as expected 2.0% reading. Consumers carried the load.

First-Quarter Real GDP 0.7%; Spending Slowest Since 2009: Nowcast Model Needs Serious Work

First quarter real GDP came in at 0.7% vs an Econoday consensus estimate of 1.1%. Consumer spending was the weakest since the 4th quarter of 2009.

Final Model Forecasts for First Quarter GDP: GDPNow 2.0%, Nowcast 2.9%

The advance (first) estimate of first-quarter GDP is published tomorrow. The GDPNow final estimate is 2.0%, Nowcast 2.9%

Third-Quarter GDP Hits Consensus 3.3% Estimate

The BEA reported the second estimate of third-quarter GDP was 3.3%. The report matched the Econoday consensus.

First Quarter GDP (Final Estimate) 2.0%, a Bit Lower Than Expected

Consumer spending revisions took the 3rd estimate of the 1st-quarter GDP to 2.0% from 2.2%.

First Estimate of Second-Quarter GDP at 2.1% Topping Consensus

Real GDP at 2.1% topped the consensus estimate of 1.9%, the GDPNow forecast of 1.3, and Nowcast at 1.5% (revised today).

3rd-Quarter Real GDP Rises 1.9%, Near Top of Consensus Range

The BEA reported real GDP rose 1.9% for the quarter in a consensus range of 1.2% to 2.0%.

GDP at 3.1 Percent as Consensus Expected

Despite downward construction and spending revisions last month, the BEA reported second-quarter GDP came in at the consensus estimate of 3.1 percent.