Real gross domestic product (GDP) increased 0.1 percent in the first quarter of 2014, according to the “advance” estimate released today by the Bureau of Economic Analysis. In the fourth quarter of 2013, the growth rate was 2.6 percent.
First-quarter GDP highlights
The slowdown in real GDP growth reflected:
- A downturn in exports. Exports of industrial supplies and materials as well as foods, feeds, and beverages declined after increasing in the fourth quarter.
- A downturn in business investment. Spending on transportation equipment fell after rising significantly in the fourth quarter. Spending on computers and peripherals also turned down.
- A larger decrease in inventory investment. Inventory investment by retail trade companies (mainly motor vehicles dealers) declined significantly after an increase in the fourth quarter.
- A slowdown in consumer spending, mainly in nondurable goods, notably clothing and footwear as well as food and beverages. These movements were partly offset by faster growth in utilities and healthcare.
In contrast, federal government spending turned up, and imports declined after increasing in the fourth quarter.
Personal income and personal saving
Real disposable personal income (DPI)–personal income adjusted for inflation and taxes–increased 1.9 percent in the first quarter, compared with 0.8 percent in the fourth quarter of 2013. Personal saving as a percent of current -dollar DPI was 4.1 percent, compared with 4.3 percent.
Prices of goods and services bought by U.S. residents rose 1.4 percent in the first quarter, after rising 1.5 percent in the fourth quarter of 2013.
Both energy prices and food prices turned up.
Excluding food and energy, prices increased 1.4 percent in the first quarter after rising 1.8 percent in the fourth quarter.
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Today, the U.S. Bureau of Economic Analysis released real, price-adjusted estimates of personal income for states and metropolitan areas for 2008-2012. The price-adjustments are based on regional price parities (RPPs) and on BEA’s national Personal Consumption Expenditure (PCE) price index. The RPPs measure geographic differences in the price levels of consumption goods and services relative to the national average, and the PCE price index measures national price changes over time. Using the RPPs in combination with the PCE price index allows for comparisons of the purchasing power of personal income across regions and over time. These estimates are being released for the first time as official statistics.*
Growth in real metropolitan area personal income from 2011 to 2012 ranged from a decline of 3.8% in Kennewick-Richland, WA to an increase of 10.2% in Odessa, TX. After Odessa, TX, the metropolitan areas with largest growth rates of real personal income were Midland, TX (9.6%), Greenville, NC (9.0%), Jackson, TN (8.1%), and Columbus, IN (7.6%). After Kennewick-Richland, WA, the metropolitan areas with the largest declines were Watertown-Fort Drum, NY (-2.5%), State College, PA (-2.4%), Hanford-Corcoran, CA (-2.3%), and Sierra Vista-Douglas, AZ (-1.7%).
* Prototype statistics were released for evaluation and comment by users on June 12, 2013.
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Personal income increased 0.3 percent in February, the same as in January. Wages and salaries, the largest component of personal income, increased 0.2 percent after increasing 0.3 percent.
Current-dollar disposable personal income (DPI), after-tax income, increased 0.3 percent in February, the same as in January.
Real DPI, income adjusted for taxes and inflation, increased 0.3 percent in February after increasing 0.2 percent in January.
Real consumer spending, spending adjusted for price changes, increased 0.2 percent in February after increasing 0.1 percent in January. Spending on nondurable goods increased 0.3 percent after decreasing 0.9 percent.
PCE prices increased 0.1 percent in February, the same increase as in January. Excluding food and energy, PCE prices rose 0.1 percent in February.
Personal saving as a percent of DPI–the personal saving rate–was 4.3 percent in February and 4.2 percent in January.
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