The BEA’s third estimate of U.S. real GDP growth in the first quarter was 1.4% annualized, an increase from the second estimate of 1.2%. Consumption was the largest contributor to growth accounting for 0.8% while government was a drag of -0.2%.
Total real GDP in Q1 was 2.1% higher than Q1 of last year. It is now up 12.5% from it’s pre-crisis peak and 17.5% from post-crisis low.
The bulk of economic growth during the recovery is attributable to the consumption component of GDP.
However, Q1 was the slowest quarter of growth for consumption since Q2 2013.
While consumption has carried the economy, investment has only recently surpassed it’s pre-crisis peak. Net trade and government have not yet recovered to their pre-cris peak levels.
Total nominal GDP has increased 4.08% from a year ago, but once dividing by the GDP price deflator of 1.93%, real GDP has increased by just 2.10%.
Economic growth has historically been consumption driven and remains so.
Consumption has grown to account for more than two-thirds of the economy.