The first quarter GDP initial projection was 0.1%. The second estimate came in at -1.0%. Today the third estimate came in at -2.9%.
Gosh, first quarter weather was far worse than anyone realized.
Let's dive into the First Quarter 2014 Third Estimate from the BEA for some weather-details.
Real GDP declined 2.9 percent in the first quarter, after increasing 2.6 percent in the fourth. The downturn 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, partly offset by an upturn in federal government spending.
The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 1.3 percent in the first quarter, the same increase as in the second estimate; this index increased 1.5 percent in the fourth quarter. Excluding food and energy prices, the price index for gross domestic purchases increased 1.3 percent in the first quarter, compared with an increase of 1.8 percent in the fourth.
Real gross domestic income (GDI), which measures the output of the economy as the costs incurred and the incomes earned in the production of GDP, decreased 2.6 percent in the first quarter, in contrast to an increase of 2.6 percent in the fourth . For a given quarter, the estimates of GDP and GDI may differ for a variety of reasons, including the incorporation of largely independent source data. However, over longer time spans, the estimates of GDP and GDI tend to follow similar patterns of change.
Key Item Synopsis
GDP and GDI match over time. GDP was down 2.9% while GDI was down 2.6%. Take your choice. The numbers are awful.
Clearly the weather was far worse than anyone imagined.
Mike "Mish" Shedlock
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