Real gross domestic product increased at an annual rate of 1.1% in the first quarter of 2023, according to the “advance” estimate released by the Bureau of Economic Analysis (BEA) on April 27. Real GDP increased 2.6% in the fourth quarter of last year.
The “advance” estimate is based on preliminary data that is subject to further revision by the source agency, according to the BEA. The “second” estimate for the first quarter, based on more complete data, will be available May 25.
The increase in real GDP reflected increases in consumer spending, exports, federal government spending, state and local government spending, and nonresidential fixed investment that were partly offset by decreases in private inventory investment and residential fixed investment, according to the BEA. Imports, which are a subtraction in the calculation of GDP, increased.
Compared to the fourth quarter, the deceleration in real GDP in the first quarter primarily reflected a downturn in private inventory investment and a slowdown in nonresidential fixed investment, according to the BEA.
“The increase in consumer spending reflected increases in both goods and services,” the bureau said in the release. “Within goods, the leading contributor was motor vehicles and parts. Within services, the increase was led by health care and food services and accommodations. Within exports, an increase in goods (led by consumer goods, except food and automotive) was partly offset by a decrease in services (led by transport). Within federal government spending, the increase was led by nondefense spending. The increase in state and local government spending primarily reflected an increase in compensation of state and local government employees. Within nonresidential fixed investment, increases in structures and intellectual property products were partly offset by a decrease in equipment.
“The decrease in private inventory investment was led by wholesale trade (notably, machinery, equipment, and supplies) and manufacturing (led by other transportation equipment as well as petroleum and coal products). Within residential fixed investment, the leading contributor to the decrease was new single-family construction. Within imports, the increase reflected an increase in goods (mainly durable consumer goods and automotive vehicles, engines, and parts).”