Economic Growth Slower Than Previously Expected

Growth for the first quarter of this year came in 1.8%, down from the previous estimate of 2.4%. What happened?

Mark Gongloff


That’s a pretty huge downward revision to 1Q GDP - to 1.8% from 2.4%. Mostly in downgrade of consumer spending.

The Commerce Department reported today that U.S. gross domestic product grew at a sluggish 1.8% annually adjusted rate in the first quarter of this year, down from last month’s estimate of 2.4%. Although the revised number is still a significant jump from the fourth quarter’s 0.4% growth rate, it’s still a fairly large revision and stands in contrast to a recent run of positive data. The biggest driver of the downward revision was in consumer spending, which was last reported growing at 3.4% before today’s 2.6% figure. Spending by individuals, called “personal consumption expenditures” in GDP figures, accounts for about two-thirds of GDP.

Downtown Josh Brown


US econ data is now totally incomprehensible. Like Bob Dylan RT @BloombergNews: BREAKING: Economy in U.S. grew 1.8% in 1Q, revised from 2.4%

This lowish figure stands in contrast to recent positive data showing consumer resilience and optimism about the economy. One measure of consumer confidence, The Conference Board’s consumer confidence index, hit a five-year high yesterday thanks to continuing job growth and rises in home prices. Sales of new homes were at their highest level since July 2008, and the Case-Shiller index, which tracks home prices in 20 metropolitan areas, advanced 12% in the last year. A survey of consumers done by Goldman Sachs showed that “consumer spending intent,” which measures how much discretionary spending people intend to do in the next six months, also hit a post-recession high. This data, along with the consumer confidence data, is forward-looking, measuring both how consumers feel and their plans going forward. The GDP data, on the other hand, is a look back at the first quarter of the year. Hopefully the next big surprise is on the upside.

Check out more articles on!

Matthew Zeitlin is a business reporter for BuzzFeed News and is based in New York. Zeitlin reports on Wall Street and big banks.
Contact Matthew Zeitlin at
Here Are The Top Stories
  • Dylann Roof has been formally charged with nine counts of murder for the Charleston church shooting last month.
  • Britain marks 10 years since 52 people were killed in terrorist attacks in London.
  • Harry Shearer, the voice of Mr. Burns on "The Simpsons," will rejoin the show. In May, he said he was leaving.
Get The News App

More News

More News

Now Buzzing