Archive Page 4

GDP Up Slightly in First Quarter

Real gross domestic product (GDP) increased 0.2 percent in the first quarter of 2015, according to the “advance” estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2014, real GDP increased 2.2 per- cent. In the first quarter, the dollar strengthened against major currencies, imports and exports were delayed be- cause of labor disputes in key ports, energy prices declined, and several regions experienced severe weather.

April 29 GDP Q2Q

First-quarter GDP highlights
The following contributed to the increase in real GDP:

  • Consumer spending increased, mainly on household services.
  • Inventory investment increased, notably in the nondurable-goods manufacturing industry.

These positive contributions to real GDP growth were largely offset by the following:

  • The trade deficit widened in the first quarter, reflecting a decline in goods exports.
  • Business investment declined, notably in mining exploration, shafts, and wells.
  • State and local government spending declined.

Personal income and personal saving
Real disposable personal income (DPI)—personal income adjusted for inflation and taxes—increased 6.2 percent in the first quarter, compared with 3.6 percent in the fourth quarter of 2014. Personal saving as a percentage of current-dollar DPI was 5.5 percent, compared with 4.6 percent.

Q2Q Percent change April 29

First-quarter prices
Prices of goods and services bought by U.S. resi- dents decreased 1.5 percent in the first quarter, after decreasing 0.1 percent in the fourth quarter of 2014. The first-quarter decline was the largest since the first quarter of 2009.

Energy prices declined more than in the fourth quarter. Food prices also fell.

Excluding food and energy, prices increased 0.3 percent in the first quarter after increasing 0.7 percent in the fourth quarter.

For more information, read the full report.

Nondurable Goods Manufacturing Led Growth in the Fourth Quarter Gross Domestic Product by Industry

Nondurable goods manufacturing was the leading contributor to U.S. economic growth in the fourth quarter of 2014. Both private goods- and services-producing sectors contributed to the increase, while the government sector decreased. Overall, 15 of 22 industry groups contributed to the 2.2 percent increase in real GDP.

GDP by industry April 23

  • Durable goods manufacturing increased 0.3 percent following an increase of 7.0 percent, while nondurable goods increased 9.7 percent, after decreasing 6.6 percent.
  • Finance and insurance decreased 7.7 percent after increasing 21.2 percent.
  • Real estate and rental leasing increased 1.5 percent, after increasing 4.4 percent.

Value added April 23

For more information, read the full report.

BEA Tool Allows Businesses to Estimate the Economic Impact of Disasters

When a disaster strikes, understanding the economic impact on the affected community is a key to developing a recoveryrims-cover-final plan. BEA’s regional input-output modeling, RIMS II, provides disaster recovery officials a tool to model the impact on an affected community.

For instance, if a hurricane forces the temporary closure of oil refineries, fisheries or ports in a region, the disruption could affect the overall regional economy. RIMS II provides local officials with a cost-effective way to estimate that impact on the overall regional economy.

RIMS II is already widely used in both the public and private sectors for estimating the economic impact of an event, construction project, or other change in a local economy. In the public sector, for example, state and local government officials use BEA’s regional modeling system to estimate the regional impacts of military base closings. State transportation departments use it to estimate the regional impacts of airport construction and expansion. In the private sector,  business people, analysts and consultants use BEA’s regional model to estimate the regional impacts of a variety of projects, such as the development of shopping malls and sports stadiums.

To effectively use BEA’s regional modeling system, users must provide detailed information on the initial changes in output, earnings, or employment in each region and industry affected by a disaster. For instance, a disruption may lead to a lengthy layoff of 1,500 workers at a local port. The multipliers can then be used to estimate the total impact of the disaster on regional output, earnings and employment.

Earlier this year, BEA announced some changes to the regional input-output modeling system.  The updated model will continue to produce regional “multipliers” that can be used in economic impact studies to estimate the total economic impact of a project on a region and will still be updated with new regional information on an annual basis.  The main difference is the underlying national information used in the model will be updated on a less frequent basis.  The important regional information used in the model will still be updated on an annual basis.

This is just one way BEA’s products support a key pillar of the Department of Commerce’s strategic plan. That is – ensuring “communities and businesses have the necessary information, products and services to prepare for and prosper in a changing environment.”