April 28, 2019
The U.S. economy grew at a pace that surprised economists in Q1 2019, registering a four-year high to start the year. Real gross domestic product (GDP) increased 3.2% in the first quarter of 2019, according to the “advance” estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2018, real GDP increased 2.2%.
A poll by Dow Jones showed economists expected growth of 2.5%. The last time Q1 GDP topped 3% was in 2015. The report was the first indication of the health of the economy following the partial government shutdown. Investors keenly anticipated the numbers because it would help determine if a recession was brewing.
The increase in real GDP in Q1 reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, exports, state and local government spending, and nonresidential fixed investment. A decrease in residential investment partly offset these contributions.
The acceleration in real GDP growth in the first quarter reflected an upturn in state and local government spending, accelerations in private inventory investment and in exports, and a smaller decrease in residential investment. These movements were partly offset by decelerations in PCE and nonresidential fixed investment, and a downturn in federal government spending. Imports, which are a subtraction in the calculation of GDP, turned down.
Q1 Exports rose 3.7%, though imports decreased by 3.7%.
For comments, questions or concerns, please contact Dennis Kaiser