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THURSDAY, June 28, 2012 GDP GROWTH SLOWS IN FIRST QUARTER Third Estimate of GDP 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 estimates released by the Bureau of Economic Analysis. The first-quarter growth rate was unchanged from the second estimate released in May. Quarter-to-Quarter Growth in Real GDP 6 4 2 Percent GDP highlights Net exports increased (after decreasing in the fourth quarter), consumer spending accelerated, and residential housing investment picked up in the first quarter. These positive economic contributions, however, were more than offset by a slowdown in inventory investment. 0 -2 -4 -6 The slowdown in inventory investment reflected a sharp downturn in the manufacturing and wholesale industries. In contrast, retail inventory investment turned up, especially by motor vehicles dealers. -8 -10 II III 2008 IV I II III 2009 IV I II 2010 III IV I II 2011 III IV 2012 I Real GDP growth is measured at seasonally adjusted annual rates. Revisions to GDP For the third estimate of first-quarter real GDP growth, upward revisions to net exports and business investment in structures were offset by downward revisions to consumer spending, inventory investment, and state and local government spending. Disposable income and saving Real disposable personal income—which adjusts personal income for taxes and inflation—rose 0.7 percent in the first quarter, compared with 0.2 percent in the fourth quarter. The personal saving rate—saving as a percentage of disposable personal income—was 3.7 percent, compared with 4.2 percent in the fourth quarter. The personal saving rate has declined for six quarters in a row. Corporate profits First-quarter corporate profits fell 0.3 percent at a quarterly rate following a 0.9 percent rise in the fourth quarter. Quarter-to-Quarter Growth in Corporate Profits 20 10 0 Percent First-quarter nonfinancial profits rose 1.4 percent after rising 2.6 percent, and financial profits rose 5.7 percent after rising 7.0 percent. Profits from the rest of the world fell 11.8 percent, after declining 9.2 percent. The first-quarter decline reflected a 2.2 percent drop in receipts from abroad and a 15.9 percent rise in payments to entities abroad. -10 -20 -30 II III 2008 IV I II 2009 III IV I II 2010 III IV I II 2011 III 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 advance estimate of GDP for the second quarter and the annual revision of the national income and product accounts will be released on July 27, 2012. Contact: Ralph Stewart or Jeannine Aversa (202) 606-2649 Bureau of Economic Analysis, U.S. Department of Commerce