Q1's 2.2 GDP Stronger Than Q4's 3.0
by Bob McTeer
April 27, 2012
This morning’s initial first-quarter real GDP increase at a 2.2 percent annual rate was stronger than the fourth quarter’s 3.0 percent after adjustment for volatile inventory fluctuations. An inventory buildup accounted for two-thirds of the fourth-quarter increase. Real Final Sales—GDP minus inventories—grew only 1.1 percent in the first quarter versus 1.6 percent in the first quarter. I would argue that the first quarter was a bit stronger than the fourth. Of course, there will be two more estimates before the final numbers are established for the first quarter, and the fourth-quarter estimate will be included in the annual revisions in July.
The price index for gross domestic purchases increased at a rate of 2.4 percent, compared with only 1.1 percent in the fourth quarter—not overly large, but headed in the wrong direction.