Newsroom
April 28, 2016
U.S. economy grows 0.5% in 1Q
The U.S. economy grew by a tepid 0.5 percent in the first quarter, which is the weakest growth pace in two years, according to the Commerce Department's initial estimate Thursday.
"First quarter [gross domestic product] results have been consistently disappointing in recent years," NAFCU Research Assistant Yun Cohen said in a Macro Data Flash report. "Multiple factors appear to have contributed to the slowdown, including financial market turmoil, weaker overseas demand, a stronger dollar and low commodity prices."
Consumer spending increased 1.9 percent, government spending increased 1.2 percent, residential investment increased 14.8 percent and nonresidential investment decreased 5.9 percent. Inventory accumulation decreased from $78.3 billion in the fourth quarter last year to $60.9 billion. Net exports fell from $-551.9 billion to $-566.6 billion.
"Consumer spending, which accounts for more than two-thirds of U.S. economic activity, also decelerated for the third consecutive quarter," Cohen said. "However, the economy is expected to perform better later this year as the labor market improves and some of the transitory headwinds subside."
Core PCE inflation (excluding food and energy), the Fed's preferred inflation metric, increased from 1.3 percent in the fourth quarter 2015 to 2.1 percent in the first quarter 2016. Overall PCE inflation was 0.3 percent in the first quarter – unchanged from the fourth quarter.
"First quarter [gross domestic product] results have been consistently disappointing in recent years," NAFCU Research Assistant Yun Cohen said in a Macro Data Flash report. "Multiple factors appear to have contributed to the slowdown, including financial market turmoil, weaker overseas demand, a stronger dollar and low commodity prices."
Consumer spending increased 1.9 percent, government spending increased 1.2 percent, residential investment increased 14.8 percent and nonresidential investment decreased 5.9 percent. Inventory accumulation decreased from $78.3 billion in the fourth quarter last year to $60.9 billion. Net exports fell from $-551.9 billion to $-566.6 billion.
"Consumer spending, which accounts for more than two-thirds of U.S. economic activity, also decelerated for the third consecutive quarter," Cohen said. "However, the economy is expected to perform better later this year as the labor market improves and some of the transitory headwinds subside."
Core PCE inflation (excluding food and energy), the Fed's preferred inflation metric, increased from 1.3 percent in the fourth quarter 2015 to 2.1 percent in the first quarter 2016. Overall PCE inflation was 0.3 percent in the first quarter – unchanged from the fourth quarter.
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