WASHINGTON — The US economy slowed sharply in the first three months of the year. The slowdown, while worse than expected, is likely to be temporary as growth is expected to rebound with warmer weather. Growth slowed to a barely discernible 0.1 per cent annual rate in the January-March quarter, the Commerce Department said Wednesday. That was the weakest pace since the end of 2012 and was down from a 2.6 per cent rate in the previous quarter.
The Bureau emphasized that the first-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency The "second" estimate for the first quarter, based on more complete data, will be released on May 29, 2014.
The increase in real GDP in the first quarter primarily reflected a positive contribution from personal consumption expenditures (PCE) that was partly offset by negative contributions from exports, private inventory investment, nonresidential fixed investment, residential fixed investment, and state and local government spending. Imports, which are a subtraction in the calculation of GDP, decreased.
Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever produced -- increased 0.9 percent in the first quarter, compared with an increase of 1.6 percent in the fourth.
Current-dollar personal income increased $122.0 billion, or 3.5 percent, in the first quarter, compared with an increase of $78.5 billion, or 2.2 percent, in the fourth. The acceleration in personal income primarily reflected an acceleration in government social benefits to persons.
Personal current taxes increased $18.9 billion in the first quarter, compared with an increase of $21.4 billion in the fourth.
Disposable personal income increased $103.1 billion, or 3.3 percent, in the first quarter, compared with an increase of $57.1 billion, or 1.8 percent, in the fourth. Real disposable personal income increased 1.9 percent in the first quarter, compared with an increase of 0.8 percent in the fourth.
Personal outlays increased $131.8 billion, or 4.4 percent, in the first quarter, compared with an increase of $127.0 billion, or 4.3 percent, in the fourth.
Personal saving -- disposable personal income less personal outlays decreased -- was $518.7 billion in the first quarter, compared with $547.4 billion in the fourth.
The personal saving rate -- personal saving as a percentage of disposable personal income decreased – was 4.1 percent in the first quarter, compared with 4.3 percent in the fourth.
For a comparison of personal saving in BEA’s national income and product accounts with personal saving in the Federal Reserve Board’s financial accounts of the United States and data on changes in net worth, go to www.bea.gov/national/nipaweb/Nipa-Frb.asp.