Home   Logon   Mobile Site   Research and Commentary   About Us   Call 1.800.621.1675 or Email Us       Follow Us: 

Search by Ticker, Keyword or CUSIP       

Blog Home
   Brian Wesbury
Chief Economist
Click for Bio
Follow Brian on Twitter Follow Brian on LinkedIn View Videos on YouTube
   Bob Stein
Deputy Chief Economist
Click for Bio
Follow Bob on Twitter Follow Bob on LinkedIn View Videos on YouTube
  Real GDP Revised to a 1.8% Annual Growth Rate in Q1
Posted Under: Data Watch • GDP • Government • Fed Reserve

Implications: As of the first quarter, the Plow Horse economy was still plodding along, no faster or slower than in the past couple of years. Real growth in the first quarter was revised down to a 1.8% annual rate, largely a result of downward revisions to personal consumption. Still, this growth rate is slightly above the 1.7% gain in real GDP in 2012 and we expect the upward trend in growth to continue. Despite downward revisions, real (inflation-adjusted) consumer spending was up at a 2.6% annual rate in Q1, the fastest pace since early 2010. Private-sector real GDP growth (real GDP growth excluding government purchases) was up at a 3.3% annual rate in Q1. Corporate profits were revised higher in Q1 and real gross domestic income – which includes worker compensation and corporate profits – climbed at a 2.5% rate in Q1 and is up 2.2% in the past year. Today's data do not suggest the Federal Reserve needs to stay loose for longer. Nominal GDP (real growth plus inflation) is up 3.3% from a year ago and up at a 3.9% annual rate in the past two years, no different than the average over the past ten years. In other words, right now the Federal Reserve is keeping interest rates near zero and continuing to rapidly expand its balance sheet at the same time that nominal GDP growth appears quite normal. As a result, we continue to see gradually rising inflation over at least the next few years. Looking at the data so far for Q2 it looks like the economy has picked up a little steam, with real GDP growing at a roughly 2.5% annual rate. In particular, business investment and government purchases should both contribute more to real GDP growth in Q2 than in Q1.

Click here for a PDF version
Posted on Wednesday, June 26, 2013 @ 10:11 AM • Post Link Share: 
Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2021 All rights reserved.