1Q2010 GDP: Revisions Going the Wrong Way

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The U.S. economy grew at a 3.0 percent pace in 1Q2010 - slower than the 3.2 percent previously reported – primarily because of increases in consumer spending and investment in business software that were smaller than originally estimated.

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Growth in real 1Q2010 GDP reflected positive contributions from personal consumption expenditures (PCE), private inventory investment (a component of private domestic investment, or “PDI”), exports, and nonresidential fixed investment (another PDI component) that were partly offset by negative contributions from state and local government spending (government consumption expenditures, or "GCE") and residential fixed investment (another PDI component). Imports, which are a subtraction in the calculation of GDP, increased.

The downward revisions in real GDP reflected decelerations in private inventory investment and in exports, a downturn in residential fixed investment, a larger decrease in state and local government spending, and a deceleration in nonresidential fixed investment that were partly offset by an acceleration in PCE and a deceleration in imports.