U.S. first quarter GDP revised down 0.5% in third estimate
June 26 (UPI) -- The U.S. economy shrank at a faster pace in the beginning of the year than originally reported, as new economic data released Thursday showed a more significant drop in consumer spending.
The U.S. Bureau of Economic Analysis announced that the real Gross Domestic Product was reviesed downward to an annualized rate of -0.5% from January through March on new first-quarter data from the Census Bureau Quarterly Services Survey, among other sources.
The dip was deeper than the 0.2% decline reported in the second estimate.
The first quarter weakening of the GDP was attributed to a trade deficit created when American businesses stocked up on imports as the Trump administration's tariffs loomed. Imports were revised as down in the third estimate, but still higher than exports, which led to GDP shrinkage.
"Finance and insurance; agriculture, forestry, fishing, and hunting; and wholesale trade were the leading contributors to the 0.5% decrease in GDP at an annualized rate in Q1," the BEA posted to X Thursday.
Final sales to private domestic purchasers, added to the total of consumer spending and gross private fixed investment, did increase by 1.9% in the first quarter, but that was also revised and found to be down 0.6% from the earlier estimate.
Gross output did rise 0.6% in the first quarter, which showed an increase of 1.1% for private service-producing industries, but that was partially offset by decreases of 0.6% for both private goods-producing industries and for government.
On the other hand, gross domestic purchases price index rose 3.4% in the first quarter after being revised up 0.1% from the previous assessment, and the personal consumption expenditures, or PCE, price index grew 3.7%. However, the BEA noted in the release that from "an industry perspective, the decrease in real GDP reflected decreases of 2.8% in real value added for private goods-producing industries and 0.3% for private services-producing industries that were partly offset by an increase of 2.0 percent in real value added for government."
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