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THURSDAY, May 31, 2012 GDP GROWTH MODERATES IN FIRST QUARTER Corporate Profits Rise Real gross domestic product (GDP) rose 1.9 percent in the first quarter of 2012 after rising 3.0 percent in the fourth quarter, according to the second estimate released today by the Bureau of Economic Analysis. The first-quarter growth rate was 0.3 percentage point less than the “advance” estimate released in April. Over the past 4 quarters, real GDP grew 2.0 percent. First-quarter highlights An acceleration in consumer spending in the first quarter was more than offset by a slowdown in inventory investment. 4 2 Percent Consumer spending was strong in the first quarter, rising 2.7 percent after rising 2.1 percent in the fourth quarter. The firstquarter increase was the largest since the fourth quarter of 2010. Spending on services and nondurable goods accelerated, more than offsetting a slowdown in spending on durable goods (mainly motor vehicles and parts). Quarter-to-Quarter Growth in Real GDP 6 0 -2 -4 -6 -8 -10 II III IV 2008 I II III 2009 IV I II III 2010 IV I II III 2011 IV I 2012 Real GDP growth is measured at seasonally adjusted annual rates. The slowdown in inventory investment reflected a sharp downturn in inventory investment by nondurablegoods wholesalers and manufacturers. A slowdown in business investment, mainly in industrial equipment and in computers and software, also contributed to the slowdown in economic growth. Revisions to GDP The downward revision of real GDP growth for the first quarter was largely accounted for by a downward revision to inventory investment; manufacturing, wholesale, and retail inventories were all revised down. In addition, imports was revised up. Partly offsetting these revisions, business investment and exports were revised up. Quarter-to-Quarter Growth in Corporate Profits Corporate profits BEA released its first estimate of firstquarter corporate profits. 10 0 Percent Profits increased 0.6 percent at a quarterly rate, following a 0.9 percent increase in the fourth quarter of 2011. Nonfinancial profits rose 0.6 percent, while financial profits rose 4.5 percent. Profits from the rest of the world fell 3.8 percent. 20 -10 -20 Over the last 4 quarters, corporate profits increased 6.5 percent. -30 II III 2008 IV I II III 2009 IV I II III 2010 IV I II III 2011 IV I 2012 Corporate profits growth is measured as the percent change from the previous quarter. 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 third estimate of GDP for the first quarter of 2012 and a revised estimate of corporate profits will be released on June 28, 2012. Contact: Ralph Stewart or Thomas Dail (202) 606-2649 Bureau of Economic Analysis, U.S. Department of Commerce