April 30, 2014

GDP expands slightly in 1Q

May 1, 2014 – The U.S. gross domestic product expanded by 0.1 percent in the first quarter, which economists attribute partly to severe winter weather in the first two months of the year, according to a NAFCU Macro Data Flash.

Research Assistant Doug Christman analyzed data from the Bureau of Economic Analysis for the report and found that a downturn in exports and a decrease in private inventory investment were the largest drags on the GDP this quarter.

"Personal consumption contributed to the positive growth, while negative contributions from the other segments partially offset growth in the first quarter," Christman wrote. "The weakness in GDP was concentrated in the first two months of the year during the severe winter weather. The economy is expected to improve throughout next year as the labor market improves and pent up demand is released."

Core personal consumption expenditure inflation (excluding food and energy), the Federal Reserve's key inflation metric, stayed at 1.3 percent in the first quarter, while overall PCE inflation went up from 1.1 percent in the previous quarter to 1.4 percent.