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Saturday, April 27

27th Apr - Special: US Q1-2013 GDP

Gross Domestic Product, Q1 2013Bureau of Economic Analysis
The increase in real GDP in the first quarter primarily reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, exports, residential investment, and nonresidential fixed investment that were partly offset by negative contributions from federal government spending and state and local government spending.  Imports, which are a subtraction in the calculation of GDP, increased.

(Excel) Current-dollar and "real" GDPBEA (xls)

(Excel) Percent change from preceding periodBEA (xls)

(Interactive Tables) GDP and the National Income and Product AccountBEA

Information on the 2013 comprehensive revision of the GDP accountsBEA

Growth falls short of forecasts, weakness aheadReuters
The economy regained speed in the first quarter, but not as much as expected, heightening fears it could struggle to cope with deep government spending cuts and higher taxes.

(video) 2.5% economy may be as good as it gets (2:37)Reuters

Growth in U.S. Trails Forecasts as Defense Spending FallsBB
The U.S. economy grew less than forecast in the first quarter as a drop in defense outlays undercut the biggest increase in consumer spending in two years.

Federal Cuts Are Concern in Modest U.S. GrowthNYT
The number was a welcome improvement from the unusually sluggish growth at the end of 2012, but significant government spending cuts and the pinch from recent tax increases look likely to keep the economy in stall speed in the months ahead.

GDP up 2.5 percent in Q1, weaker than expectedHandelsbanken
due to high imports and declining defence spending

Q1 GDP Rebounds, But Falls Short Of ForecastsThe Capital Spectator
The key takeaway is that the US economy continued to post modest growth in the first quarter. The concern is that the momentum is slowing, or so several key indicators in March imply-

Real GDP increased 2.5% Annualized in Q1Calculated Risk
This was below expectations of a 3.1% growth rate, but domestic demand was decent with PCE and private investment increasing.

Did sequestration cause weak Q1 GDP?Money Supply / FT
The best thing to do is probably to disregard the defence number altogether along with the 1 percentage point rise in inventories. That leaves you with growth of a bit more than 2 per cent, the same miserable level where we have been stuck for the last few years, and not a happy starting point if the real effects of sequestration still lie ahead.

GDP Takeaway: Consumers Dip Heavily Into SavingsMoneyBeat / WSJ
But considering Americans were hit by higher taxes and rising gas prices and after-tax income fell sharply in the first quarter, how did they muster up the money to boost their spending? The answer: Americans significantly dipped into their piggy banks during the first three months of the year to boost consumption. The personal savings rate fell to 2.6% in the first quarter, the lowest level since the fourth quarter of 2007.

Real GDP Per Capita: Another Perspective on the Economydshort
The regression illustrates the fact that the trend since the Great Recession has a visibly lower slope than long-term trend. In fact, the current GDP per-capita is 11.6% below the regression trend.

A Welcome Increase from Q4 But Below Expectationsdshort
Here is a look at GDP since Q2 1947 together with the real (inflation-adjusted) S&P Composite.

Five Takeaways From GDP ReportWSJ
Consumers look strong, businesses, less so. Government remains a drag. Watch the trend, but worry about the future.  

US GDP miss on public consumption, net exportsTradingFloor
Inventories picked up speed following a dismal showing in the last quarter of 2012. Private consumption was stronger than expected at 3.2 percent despite the removal of the payroll tax cut.

Economists React: ‘Persistent,’ but ‘Underwhelming’ GrowthWSJ

U.S. first quarter GDP – graphic of the dayThomson Reuters

GDP, in ChartsWSJ

Grows By Only 2.5%, Biggest Miss To Expectations Since Sep-2011ZH

Total US Debt To GDP: 105%ZH

The World Reacts To The US GDP Miss (Or Spot The Odd Market Out)ZH
Gold surged; the USD weakened (with JPY surging in an anti-Abe way); and Treasury yields plunged (amid increasing growth concerns. But the one market that anyone in power cares about, the US equity market, did nothing, absolutely nothing.

Let's Stop Poring Over the Detailed Internals of the GDP ReportSlate
I don't think this GDP report tells you much more than what you can see looking out the window.

A stiffening headwindFree exchange / The Economist
And so America's mediocre recovery will probably continue through 2013, despite clear improvements in housing markets and household finances. America's unemployed deserve better, but for now Washington lacks the will to try to improve their lot.

The incredible stagnant U.S. economyWonkblog / WP
We’re muddling along at basically the same pace we’ve been at for nearly four straight years of this dismal recovery, with growth too slow to make up the lost economic ground from the 2008-2009 recession.

Yes, the sequester is hurting growth Wonkblog / WP
One of the factors appears to be that the sequester, particularly the defense spending cuts, took a bigger bite out of the economic recovery than anyone expected.
Gross Domestic Product Report Has Good News and Bad NewsBrookings
This GDP report provides a soon-to-be-revised and noisy indicator of what happened in the economy a few months back. The bigger picture is that we have a fledgling recovery which needs help, but isn't getting it: Fiscal policy is set as a drag on growth, and monetary policy delivering below-target inflation.

US GDP Growth Accelerates from a Crawl to a Walk in Q1EconoMonitor
The average revision between the advance and third estimates, without regard to sign, is 0.7 percentage points. If the third estimate of Q1 GDP growth, due out in June, is revised by no more than the average amount, it should fall in the range of 1.8 to 3.2 percent.

Q1 GDP and InvestmentCalculated Risk
Overall this was a medicore report and below expectations (mostly due to government spending and trade).  The increase in PCE and RI were positives, but the ongoing government budget cuts continue to slow the economy. 

Another mediocre GDP report: is this the new normal?Econbrowser
Although many analysts have been describing the decline in government purchases of goods and services during the last two quarters as reflecting austerity policies at the federal, state, and local levels, another relevant factor is that spending on goods and services is being crowded out by the budget demands of making growing transfer payments.