US real gross domestic product (GDP) fell an
annualised 2.9% in the first quarter of
2014, according to the third estimate released today by the Bureau of Economic
Analysis. In the fourth quarter of 2013, real GDP increased 2.6%. It was the
fastest rate of decline since the first quarter of 2009, when output fell 5.4%
and has been mainly blamed on bad weather.
First-quarter highlights The decline in real GDP was largely accounted for by significant declines in nonfarm inventory investment and in net exports. In addition, state and local government spending, business investment, and housing investment also contributed to the real GDP decline. In contrast, consumer spending increased, notably in services (mainly home utilities).
Revisions: The first-quarter real GDP growth rate was revised down 1.9%age points from the second estimate released in May, based on newly available source data.
- Consumer spending was revised down, primarily reflecting a downward
revision to services, mainly to health care;
- Exports of goods were revised down, reflecting revisions to industrial
supplies and materials and to foods, feeds, and beverages. Exports of
services were also revised down;
- Imports of goods were revised up, mainly non-auto capital goods as well
as vehicles, engines, and parts. Imports of services were also revised up,
mainly travel services.
Corporate profits: BEA’s measure of profits declined
9.1% at a quarterly rate in the first quarter, after increasing 2.2% in the previous quarter, according to updated estimates. The decline was
the largest since the fourth quarter of 2008.
- Profits of nonfinancial corporations fell 8.0% after rising 1.5%;
- Profits of financial corporations fell 15.1% after rising 1.3%;
- Profits from the rest of the world fell 5.8% after rising 5.5%;
- Over the last 4 quarters, corporate profits fell 2.2%.