BEA Revises 1st Quarter 2019 GDP Growth Slightly Downward To 3.07%

The Numbers, as Revised 

As a quick reminder, the classic definition of the GDP can be summarized with the following equation 

GDP = private consumption + gross private investment + government spending + (exports - imports)

or, as it is commonly expressed in algebraic shorthand 

GDP = C + I + G + (X-M)

In the new report the values for that equation (total dollars, percentage of the total GDP, and contribution to the final percentage growth number) are as follows 

The quarter-to-quarter changes in the contributions that various components make to the overall GDP can be best understood from the table below, which breaks out the component contributions in more detail and over time. In the table below we have split the "C" component into goods and services, split the "I" component into fixed investment and inventories, separated exports from imports, added a line for the BEA's "Real Final Sales of Domestic Product" and listed the quarters in columns with the most current to the left 

Summary and Commentary 

Several key points can be taken from this revision for the 1st quarter of 2019 

-- The BEA confirmed that consumer spending on goods contracted. The relatively soft growth in consumer spending on services was left unchanged. 

-- The annualized growth in commercial and private fixed investments more than halved relative to the prior quarter. 

-- Imports added +0.39% annualized growth to the headline, even though it actually reflects softening import spending in the midst of generally weaker global trade. 

-- All of this still left the headline number in the "Goldilocks" zone of economic growth. 

The question remains: Are these fair skies a sign of a well-oiled and unstoppable economy? Or is this merely the calm before the next storm? 

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