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Q1 GDP Third Estimate Slightly Better Than Forecast at 1.1 Percent

June 28, 2016

by Jill Mislinski

The Third Estimate for Q1 GDP, to one decimal, came in at 1.1 percent, up from 0.8 percent in last month's Second Estimate. Today's number was a bit above most mainstream estimates, with Investing.com forecasting 1.0 percent and the Briefing.com consensus also at 1.0 percent.

Here is an excerpt from the Bureau of Economic Analysis news release:

Real gross domestic product -- the value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production, adjusted for price changes -- increased at an annual rate of 1.1 percent in the first quarter of 2016, according to the "third" estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2015, real GDP increased 1.4 percent.

The GDP estimate released today is based on more complete source data than were available for the "second" estimate issued last month. In the second estimate, the increase in real GDP was 0.8 percent. With the third estimate for the first quarter, the general picture of economic growth remains the same;
exports increased more than previously estimated.

The increase in real GDP in the first quarter reflected positive contributions from personal consumption expenditures (PCE), residential fixed investment, state and local government spending, and exports that were partly offset by negative contributions from nonresidential fixed investment, private inventory investment, and federal government spending. Imports, which are a subtraction in the calculation of GDP, decreased. [Full Release]

Here is a look at Quarterly GDP since Q2 1947. Prior to 1947, GDP was calculated annually. To be more precise, the chart shows is the annualized percent change from the preceding quarter in Real (inflation-adjusted) Gross Domestic Product. We've also included recessions, which are determined by the National Bureau of Economic Research (NBER). Also illustrated are the 3.23% average (arithmetic mean) and the 10-year moving average, currently at 1.31 percent.

Quarterly GDP since 1947

Note: The headline 1.1% real compounded rate of change is 1.07% at two decimal places.

Here is a log-scale chart of real GDP with an exponential regression, which helps us understand growth cycles since the 1947 inception of quarterly GDP. The latest number puts us 14.9% below trend, the largest negative spread in the history of this series.

with a Regression

A particularly telling representation of slowing growth in the US economy is the year-over-year rate of change. The average rate at the start of recessions is 3.35%. Eight of the 11 recessions over this timeframe have begun at a higher level of real YoY GDP.

Real GDP Year-over-Year

In summary, the Q1 GDP Third Estimate of 1.1 percent was a slight increase over the Second Estimate of 0.8 percent and a bit above the mainstream expectations.

Other GDP updates:

Real GDP Per Capita

Visualizing GDP