US GDP grows at annual rate of 2% in Q1 2023: BEA

The updated GDP figures are based on more comprehensive source data than those used in the second estimate, which recorded a 1.3 per cent rise. The revisions mainly reflect upward adjustments to exports and consumer spending figures, partly offset by downward amendments to non-residential fixed investment and federal government spending. Imports, a subtraction in GDP calculation, were also revised down.

The Q1 GDP growth reflects increases in consumer spending, exports, state and local government spending, federal government spending, and non-residential fixed investment. However, these gains were partially offset by decreases in private inventory investment and residential fixed investment. Imports, on the other hand, increased, as per the BEA.

Compared to the previous quarter, the slowdown in real GDP growth in Q1 2023 primarily resulted from a downturn in private inventory investment and a slowdown in non-residential fixed investment. These factors were partially compensated by an acceleration in consumer spending, an upturn in exports, and a smaller decrease in residential fixed investment. Meanwhile, imports trended upwards.

Current dollar GDP increased 6.1 per cent at an annual rate, or $391.8 billion, to $26.53 trillion in Q1. This marks an upward revision of $43.5 billion from the prior estimate.

The price index for gross domestic purchases grew 3.8 per cent in Q1, the same as the previous estimate. The personal consumption expenditures (PCE) price index rose 4.1 per cent, revised down 0.1 percentage point. The PCE price index excluding food and energy prices increased 4.9 per cent, a downward revision of 0.1 percentage point.

In contrast to the GDP growth, real gross domestic income (GDI) declined 1.8 per cent in Q1, representing an upward revision of 0.5 percentage points from the previous estimate.

Corporate profits from current production decreased $121.5 billion in the first quarter, an upward revision of $29.7 billion from the prior estimate. Both financial and nonfinancial domestic corporations saw profits decline, by $9.4 billion and $102.9 billion, respectively. Profits from the rest of the world also decreased by $9.2 billion, despite a $7.2 billion upward revision.

The value added of private goods-producing industries decreased 0.7 per cent in Q1. However, 15 of 22 industry groups contributed to the increase in real GDP.

Fibre2Fashion News Desk (DP)