Real GDP for the first quarter of 2016 grew at an annual rate of 0.8%, according to the Bureau of Economic Analysis’s second estimate. First quarter GDP was revised up from the advance estimate of 0.5% growth, as the decrease in private inventory investment was smaller than previously estimated. During the fourth quarter of 2015, real GDP grew at a rate of 1.4%.
Consumption was the largest contributor to GDP accounting for 1.3% of growth, compared to 1.7% during the fourth quarter. Consumption spending grew by $53.5 billion during the first quarter of 2016, compared to $68.3 billion during the fourth quarter of 2015.
Non-residential fixed investment was a significant drag on GDP, subtracting 0.8% from growth. The fall in non-residential fixed investment was partially offset by a $22.0 billion increase in residential fixed investment, which contributed 0.6% to GDP.
Inventories subtracted 0.2% from GDP, a lower figure than the 0.3% subtraction estimated previously. Both farm and nonfarm private inventories declined during the quarter. The negative impact of net exports was also revised during the quarter, falling from a 0.3% drag to a 0.2% drag.
State and local government spending grew, contributing 0.3% to GDP. This was offset by a decrease in Federal government spending, which was a 0.1% drag.
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