Real gross domestic product (GDP) is comprised of four major subcomponents: personal consumption expenditures, gross private domestic investment, net exports, and government consumption expenditures. In the latest Q1 2025 third estimate update it was reported that real GDP decreased at an annual rate of 0.5%. Two of the four components made positive contributions.
Real gross domestic product (GDP) decreased at an annual rate of 0.5 percent in the first quarter of 2025 (January, February, and March), according to the third estimate released by the U.S. Bureau of Economic Analysis. In the fourth quarter of 2024, real GDP increased 2.4 percent. The decrease in real GDP in the first quarter primarily reflected an increase in imports, which are a subtraction in the calculation of GDP, and a decrease in government spending. These movements were partly offset by increases in investment and consumer spending. (Link)
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- Personal consumption expenditures (PCE) contributed 0.31
- Down from Q1 advance estimate
- Down from Q1 second estimate
- Down from Q4 third estimate
- Gross private domestic investment (GPDI) contributed 3.90
- Up from Q1 advance estimate
- Down from Q1 second estimate
- Up from Q4 third estimate
- Net exports of goods and services (NEGS) contributed -4.61
- Down from Q1 advance estimate
- Up from Q1 second estimate
- Down from Q4 third estimate
- Government consumption expenditures (GCE) contributed -0.10
- Up from Q1 advance estimate
- Up from Q1 second estimate
- Down from Q4 third estimate
Over time, the personal consumption expenditures (PCE) component has demonstrated the strongest and most consistent correlation with real GDP. When PCE is positive, GDP tends to be positive as well, and when PCE declines, GDP often follows—though there have been exceptions, such as in Q2 2022.
