Real gross domestic product (GDP) grew at an annualized rate of 1.8 percent in the first quarter of 2011 after posting a growth rate of 3.1 percent in the fourth quarter of 2010, according to data released today by the Bureau of Economic Analysis.
The deceleration in real GDP can be attributed to a sharp upturn in imports, a deceleration in PCE (personal consumption expenditures), a larger decrease in federal government spending, and decelerations in nonresidential fixed investment and in exports that were partly offset by a sharp upturn in private inventory investment.
Real personal consumption expenditures slowed in the first quarter growing at an annual pace of 2.7 percent compared with an increase of 4.0 percent in the fourth.
Real nonresidential fixed investment increased 1.8 percent in the first quarter, compared with an increase of 7.7 percent in the fourth. Investments in residential and nonresidential structures fell in the first quarter, mostly offsetting an increase in spending on equipment and software.
Spending by both the federal government and state and local governments fell in the first quarter. Spending on national defense fueled the drop in spending at the federal level declining by 11.7 percent.
Private businesses increased inventories $43.8 billion in the first quarter. The change in real private inventories added 0.93 percentage point to the first-quarter change in real GDP.
Real final sales of domestic product -- GDP less change in private inventories -- increased 0.8 percent in the first quarter, compared with an increase of 6.7 percent in the fourth.
4.28.11 (Source: Bureau of Economic Analysis)