Survey of Current Business
May 2019
Volume 99, Number 5

GDP and the Economy

Advance Estimates for the First Quarter of 2019

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Real gross domestic product (GDP) increased at an annual rate of 3.2 percent in the first quarter of 2019, according to the advance estimates of the National Income and Product Accounts (NIPAs) (chart 1 and table 1).1 In the fourth quarter of 2018, real GDP increased 2.2 percent.

The increase in real GDP in the first quarter reflected positive contributions from consumer spending, inventory investment, exports, state and local government spending, and nonresidential fixed investment.2 Imports, which are a subtraction in the calculation of GDP, decreased (chart 2 and table 1).

The acceleration in real GDP in the first quarter reflected an upturn in state and local government spending (line 26), accelerations in inventory investment (line 14) and in exports (line 16), and a smaller decrease in residential investment (line 13). These movements were partly offset by decelerations in consumer spending (line 2) and nonresidential fixed investment (line 9) and a downturn in federal government spending (line 23). Imports, which are a subtraction in the calculation of GDP, turned down (line 19).

  • The upturn in state and local government spending primarily reflected an upturn in gross investment on structures.
  • The acceleration in inventory investment primarily reflected an upturn in manufacturing inventory investment, for both durable and nondurable-goods industries.
  • The acceleration in exports primarily reflected upturns in foods, feeds, and beverages and in automotive vehicles, engines, and parts. These movements were partly offset by downturns in industrial supplies and materials and in nonautomotive capital goods.
  • The smaller decrease in residential investment primarily reflected an upturn in brokers' commissions and other ownership transfer costs following four consecutive quarters of decline.
  • The deceleration in consumer spending primarily reflected a downturn in goods, mainly for spending on new motor vehicles (most notably, new light-truck purchases). Spending on services also decelerated, primarily reflecting a downturn in spending by nonprofit institutions serving households (most notably, professional advocacy, and hospitals) that was partly offset by accelerations in spending for health care and for financial services and insurance.
  • The downturn in federal government spending reflected a downturn in gross investment for defense equipment (mainly aircraft).
  • The downturn in imports reflected downturns in both goods and services. Within goods imports, the downturn was widespread; the leading contributors were a downturn in motor vehicles and a smaller increase in consumer goods (nonfood, nonautomotive). Within services imports, travel services and transport services both turned down.

Prices for gross domestic purchases, goods and services purchased by U.S. residents, increased 0.8 percent in the first quarter after increasing 1.7 percent in the fourth quarter (table 2, line 1, and chart 3). The deceleration primarily reflected a deceleration in prices paid for consumer services (led by a downturn in financial services and insurance). Food prices accelerated (line 20), increasing 3.0 percent after increasing 0.2 percent. Energy goods and services decreased 16.7 percent in the first quarter after decreasing 1.6 percent in the fourth quarter (line 21). Gross domestic purchases prices excluding food and energy (line 22) decelerated, increasing 1.3 percent in the first quarter after increasing 1.8 percent in the fourth quarter.

Chart 3. Proices for Gross Domestic Purchases

[Click chart to expand]

Consumer prices excluding food and energy (line 25), a measure of the “core” rate of inflation, decelerated, increasing 1.3 percent in the first quarter after increasing 1.8 percent in the fourth quarter.

Personal income (table 3, line 1), which is measured in current dollars, increased $147.2 billion in the first quarter after increasing $229.0 billion in the fourth quarter. The deceleration reflected downturns in personal interest income (line 17), personal dividend income (line 18), and proprietors’ income (line 12) that were partly offset by an acceleration in personal current transfer receipts (line 19).

Personal current taxes (line 29) increased $31.1 billion in the first quarter after increasing $6.1 billion in the fourth quarter.

Disposable personal income (DPI) (line 30 and chart 4) increased $116.0 billion in the first quarter after increasing $222.9 billion in the fourth quarter.

The personal saving rate (line 33 and chart 5)—personal saving as a percentage of DPI—was 7.0 percent in the first quarter; in the fourth quarter, the personal saving rate was 6.8 percent.

Real DPI (line 35) increased 2.4 percent in the first quarter after increasing 4.3 percent in the fourth quarter. Current-dollar DPI (line 34) increased 3.0 percent after increasing 5.8 percent. The differences in the movements in real DPI and current-dollar DPI reflected a deceleration in the implicit price deflator for consumer spending, which is used to deflate DPI.

 


  1. “Real” estimates are in chained (2012) dollars, and price indexes are chain-type measures. Each GDP estimate for a quarter (advance, second, and third) incorporates increasingly comprehensive and improved source data; for more information, see “The Revisions to GDP, GDI, and Their Major Components” in the January 2018 Survey of Current Business. Quarterly estimates are expressed at seasonally adjusted annual rates, which reflect a rate of activity for a quarter as if it were maintained for a year.
  2. In this article, “consumer spending” refers to “personal consumption expenditures,” “inventory investment” refers to “change in private inventories,” and “government spending” refers to “government consumption expenditures and gross investment.”