QI GDP revised sharply downward to -2.9%; Flashback: Remember when ObamaCare saved us from contraction?By
posted at 9:11 am on June 25, 2014 by Ed Morrissey
Remember when the Obama administration considered a GDP contraction of 1% in the first quarter just a hiccup, mainly caused by weather? Good times, good times. That itself was a rather sharp downward revision from the advance estimate of 0.1%, but that was just a mere stumble compared to the plunge in the final revision. The Commerce Department now states that GDP fell at an annualized rate of -2.9% in the first quarter, the worst in more than five years:
Real gross domestic product — the output of goods and services produced by labor and property located in the United States — decreased at an annual rate of 2.9 percent in the first quarter of 2014 according to the “third” estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2013, real GDP increased 2.6 percent. …
Real GDP declined 2.9 percent in the first quarter, after increasing 2.6 percent in the fourth. This downturn in the percent change in real GDP primarily reflected a downturn in exports, a larger decrease in private inventory investment, a deceleration in PCE, and downturns in nonresidential fixed investment and in state and local government spending that were partly offset by an upturn in federal government spending.
This time the news is bad across the board. Exports dropped 8.9% in Q1, a huge drop from 2013, which wasn’t exactly spectacular either. Real final sales of domestic product dropped 1.3%, where in earlier estimates it had remained in positive territory. Business investment also fell:
Real nonresidential fixed investment decreased 1.2 percent in the first quarter, in contrast to an increase of 5.7 percent in the fourth. Nonresidential structures decreased 7.7 percent, compared with a decrease of 1.8 percent. Equipment decreased 2.8 percent, in contrast to an increase of 10.9 percent. Intellectual property products increased 6.3 percent, compared with an increase of 4.0 percent. Real residential fixed investment decreased 4.2 percent, compared with a decrease of 7.9 percent.
Read the full story here: GDP Revised downward to -2.9%