1Q2015 Gross Domestic Product: Second (Preliminary) Estimate

Click image for larger version

The Bureau of Economic Analysis (BEA) revised 1Q2015 growth in real U.S. gross domestic product (GDP) down a full percentage point, to a seasonally adjusted and annualized rate of -0.75% -- well below the already anemic “advance” estimate of +0.25% issued last month. Analysts had expected a revision to -0.8% (ranging from -1.0 to -0.2%). Personal consumption expenditures (PCE) and private domestic investment (PDI) contributed to 1Q growth, while net exports (NetX) and government consumption expenditures (GCE) subtracted from it. 

Click image for larger version

Details on 1Q revisions:

Positives –

• Consumer spending on goods improved a “smidgen” to +0.10% annualized growth;
• Fixed commercial investment also improved -- although only to a "less bad" contraction rate of -0.21% (from -0.40% in the advance report).

Negatives –

• Imports subtracted an additional -0.58% from the headline number;
• Exports declined -0.07%;
• Inventory growth was weaker by -0.41%;
• Consumer spending on services dropped -0.13%; and
• Government spending was -0.05% lower.

The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.