WASHINGTON (6/1/15)--Gross domestic product (GDP) actually fell in the first quarter, according to a second estimate by the Bureau of Economic Analysis, which initially placed real GDP growth at a meager 0.25% (Economy.com May 29).
After climbing by 2.2% in the fourth quarter of 2014, economic activity slipped by 0.75% in 1Q, the government said, with consumer spending and inventory investment as the lone bright spots.
Though, consumer sentiment has lagged into the second quarter, as the University of Michigan consumer sentiment survey index, released Friday, fell by more than 5 points in May.
“The U.S. economy stumbled badly again in the first quarter, although a number of temporary factors were in play and the economy is not in recession,” said Scott Hoyt, Moody’s analyst (Economy.com). “An unusually bad winter took a sizable bite out of expansion.”
Consumer spending climbed 1.2 points for the quarter, inventory investment rose 0.7 points, and all other major components made negative contributions.
On an annual basis, however, GDP growth accelerated, largely thanks to the massively poor first quarter in 2014. Real GDP sat 2.7% higher on a year-over-year basis in 1Q.
Personal savings for 1Q 2015 climbed 5.5% in the quarter after a 4.6% increase the prior quarter, and gross domestic income climbed by 1.4% after rising 3.7% in 4Q 2014.