A second look at how the nation's economy was doing in the first quarter shows the growth rate was a bit stronger.
The Bureau of Economic Analysis (BEA) reports real gross domestic product (GDP) -- the value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production, adjusted for price changes -- increased at an annual rate of 0.8%.
While that's a bit better than the 0.5% reported in the advance estimate released a month ago, it pales in comparison to the 1.4% growth rate chalked up in the final three months of 2015.
Consumer spending picks up
The increase in real GDP results from increases in personal consumption expenditures (PCE), residential fixed investment, and state and local government spending.
Those advances were partly offset by declines in nonresidential fixed investment, exports, private inventory investment, and federal government spending. Imports -- a subtraction in the calculation of GDP -- decreased.
The overall slowdown from the fourth quarter of last year reflects a larger decrease in nonresidential fixed investment, a deceleration in PCE, and a downturn in federal government spending. Those were offset -- in part -- by an upturn in state and local government spending, and a speedup in residential fixed investment.
Inflation and corporate profits
The price index for gross domestic purchases -- GDP inflation -- increased 0.2% in the first quarter, compared with an increase of 0.4% in the fourth quarter of 2016. Excluding food and energy prices, the “core” GDP rate increased 1.4%, compared with a 1.0% advance in the final three months of last year.
Corporate profits were finally in the black. Following a plunge of $159.6 billion in the fourth quarter, they increased $6.5 billion in the first three months of this year.
The complete report is available on the BEA website.