Consumer spending boosted GDP in Q1
The Bureau of Economic Analysis released its this morning. BEA estimates that GDP grew at a solid 3.2% annual pace in the first quarter. That鈥檚 slower than the 5.6% pace of the previous quarter, but is otherwise the strongest showing since the third quarter of 2007.
The chart above illustrates how much various types of economic activity added to (or subtracted from) first quarter growth:
The big story is the return of the American consumer. Their spending increased at a 3.6% pace during the first quarter, the fastest pace in three years. (Consumer spending added 2.6 percentage points to overall growth because it makes up about 70% of the economy).
Business investment in equipment and software (E&S) showed continued strength, rising at a 13.4% pace (and adding 0.8 percentage points to overall growth). That鈥檚 down from the blistering 19% recorded in the fourth quarter, but is still remarkably strong.
滨苍惫别苍迟辞谤颈别蝉鈥撯�揷ontinued to boost growth as well. Inventories actually increased in the first quarter, after seven quarters of declines.
On the downside, construction continued to suffer, with both housing and non-residential structures declining. Government spending fell as well, as reduced spending by state and local governments more than offset a moderate increase in purchases by the federal government.
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