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FRIDAY April 27, 2007

GROWTH SLOWS IN THE FIRST QUARTER
“Advance” Estimates of GDP

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Real gross domestic product (GDP) increased 1.3 percent in the first quarter of 2007 after increasing 2.5 percent
in the fourth quarter of 2006, according to estimates released today by the Bureau of Economic Analysis.
Quarter-to-Quarter Growth in Real GDP
8

Percent

6

4

2

0
II

III
2003

IV

I

II
III
2004

IV

I

II
III
2005

IV

I

II
III
2006

IV

I
2007

Real GDP growth is measured at seasonally adjusted annual rates.

The deceleration in real GDP growth reflected the following:
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ƒ
ƒ
ƒ

Exports turned down, mainly because of downturns in capital goods and in industrial supplies and
materials.
Imports turned up, led by petroleum and related products. (Imports are subtracted when calculating
GDP.)
Federal government spending turned down.
Consumer spending slowed, reflecting a slowdown in spending on food.

In contrast, an upturn in nonresidential business investment added to real GDP growth in the first quarter.
Investment in information processing equipment and software turned up, and investment in commercial
structures accelerated.
Prices
Inflation, as measured by prices for domestic purchases, increased 3.6 percent in the first quarter after increasing
0.2 percent in the previous quarter. Energy prices turned up, after dropping sharply in the fourth quarter of 2006.
Excluding food and energy, prices increased 2.8 percent, following an increase of 2.4 percent.
Personal income
Real disposable personal income increased 4.5 percent, following an increase of 5.3 percent.

BEA data—including GDP, personal income, the balance of payments, foreign direct investment, the input-output accounts, and
economic data for states, local areas, and industries—are available on the BEA Web site: www.bea.gov. E-mail alerts are also available.
NOTE: The “preliminary” estimate of GDP and corporate profits for the first quarter of 2007 will be released on May 31, 2007.
Contact: Ralph Stewart 202–606–2649

Bureau of Economic Analysis, U.S. Department of Commerce