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(CEP News) - U.S. advance GDP results were much worse than consensus forecasts in the first quarter, on the back of plummeting private investment and as trade levels continued to shrink.
Advance GDP for the first quarter of 2009 contracted 6.1% against expectations of a 4.7% decline. The previous quarter's 6.3% contraction was unrevised. The negative figure is the fifth decline in quarterly GDP since the credit crisis began in August 2007. Prior to the release, forecasts ranged from an 8.0% contraction to a 2.8% decline. Personal consumption, which accounts for 70% of GDP in the U.S., grew by 2.2% in the quarter, against expectations of a 0.9% jump and down from the 4.3% contraction in Q4. Leading the slowdown was a 51.8% contraction in gross private investment, including a 37.9% cutback to nonresidential spending and a 37.9% slowdown in fixed investment. Inventories were down by $103.7 billion. The report also showed a 9.4% jump in durable goods and a 1.3% increase to nondurable goods. On the trade side, exports contracted 30.0% versus a 23.6% drop in Q4, while imports pulled back 34.1% after a 17.5% decline previously. Government spending was down 3.9%, however nondefense spending was up 1.3%. The Bureau emphasized that the first-quarter 'advance' estimates are based on source data that are incomplete or subject to further revision by the source agency. By Megan Ainscow,
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, edited by Stephen Huebl,
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