Economic Output Declines in First Quarter
June 25, 2014 — The federal Bureau of Economic Analysis has released revised estimates for gross domestic product (GDP) for the first quarter of 2014.
GDP is commonly defined as “the output of goods and services produced by labor and property located in the United States,” and is often used as an indicator of growth in the economy. The new estimate shows that GDP decreased at an annual rate of 2.9 percent in the first quarter of 2014. The previous estimate, released last month, indicated only a one percent decline.
The new estimate does reflect an increase in personal consumption expenditures (PCE), however that was also lower than previously estimated.
In a press release, the Bureau of Economic Analysis stated –
“The decrease in real GDP in the first quarter primarily reflected negative contributions from private inventory investment, exports, state and local government spending, nonresidential fixed investment, and residential fixed investment that were partly offset by a positive contribution from PCE. Imports, which are a subtraction in the calculation of GDP, increased.”
U.S. Senator Dan Coats (R-Ind.), who serves as ranking Republican on the Joint Economic Committee, commented on the findings, saying, “These disappointing numbers only confirm the ongoing struggles many American families are experiencing in this stagnant economy. This staggering GDP loss makes the White House’s 3.4% growth projection for this year nearly impossible to achieve.”