Ostrum
  • News & Chronicles
  • France
  • Euro Area
  • United States
  • International
  • Politics & Society
  • Monetary Policy
  • Media
  • Decoding
  • About Philippe Waechter
Philippe Waechter's blog
  • Insights
  • About us
  • Expertise
  • Our people
  • Media

Philippe Waechter's blog
My french blog
  • News & Chronicles
  • France
  • Euro Area
  • United States
  • International
  • Politics & Society
  • Monetary Policy
  • Media
  • Decoding
  • About Philippe Waechter
  • News & Chronicles
  • Climate
  • France
  • Euro Area
  • United States
  • International
  • Politics & Society
  • Monetary Policy
  • Media
  • Decoding
Philippe Waechter's blog
Prévôté
Previous Next
  • 2 min

US GDP has been revised down for the first quarter

  • 29 May 2014
  • Philippe Waechter
  • GDP
  • Internal Demand
Total
0
Shares
0
0
0

The U.S. GDP growth for the first quarter was revised down sharply. In the first estimate, GDP growth was 0.1 % annualized rate. This figure dropped to -1% with the second estimate.
The change is important and implies a lower carryover for 2014. This latter was 1.2 % with the first estimate, it is now 0.9 %. With the same scenario for the rest of the year than before the revision, growth for 2014 can now be expected 0.3% lower.
The graph shows the GDP level and we clearly perceive the changing trend in the first months of 2014.
USA-en-2014-Q1-GDP-trendThis decline, the highest since the first quarter of 2011 (-1.29 %) can be explained mainly by lower inventories than previously estimated. This is consistent with the idea of adverse climatic conditions during the first quarter. As it was hard to produce and to deliver, companies have reduced their inventories to meet demand.
The change in inventories has a more negative contribution, from -0.57% in the first estimate to -1.62 % for the second. This is the gray bar in the graph below.
The graph shows contributions to GDP growth. I put at the end of this post, the same chart with the figures of the first estimate.
USA-en-2014-Q1-GDP-ContribThe consumption contribution is equivalent to the first estimate and is rather strong. Investment figures are revised marginally upwards and its contribution increased from -0.44 % to -0.36 %.
Thus, domestic demand has a somewhat stronger impact than in the first estimate.
There was also an adjustment in net exports. Even if exports were better oriented, increase in imports has pushed downward the net exports contribution.
The graph below shows the adjustments between the main components of GDP.
USA-en-2014-Q1-GDP-contrib-diffThe decline in activity even after revision seems consistent with a strong climatic hazard. Demand remained strong mainly on the consumer side but production conditions have deteriorated and companies have reduced their inventories to meet demand.

Figures that have been released at the end of the first quarter and in April and May, were stronger and it seems reasonable to consider that the first quarter was a temporary blip with no real persistence.
A strong rebound can now be expected as inventories are low. Nevertheless, growth figures will be mechanically lowered, probably close to 2.5 % for the full year 2014. This should not have a significant impact on the Federal Reserve behavior which saw the first quarter decline as transitory. There is no reason for the US Monetary Authority to change its scenario

Appendix Contributions calculated from the first estimate
BmeU3m-CMAIO1tH

Related Topics
  • GDP
  • Internal Demand
On the same topic
  • 3 min

Growth: the Gallic village resists

  • 20 March 2019
  • France

Philippe Waechter

INSEE, the French statistical institute published its new forecasts for the first half of this year. (Its forecasts are just for a semester to avoid being in conflict with the…
  • Business Cycle
  • Growth Profile in 2019
  • INSEE
READ
  • 1 min

The German economy on the way to normalization

  • 25 February 2019
  • Germany

Philippe Waechter

German growth stopped during the second half of 2018. During this period, the GDP was up by only +0.1% compared to the first six months (at annual rate). It can…
  • Gerùany
  • Private Demand
READ
  • 2 min

French growth's low momentum

  • 30 January 2019
  • France

Philippe Waechter

The French GDP growth was 1.1% (at annual rate) during the fourth quarter of last year. The same number than during the third quarter. Social unrest has had no impact…
  • GDP
READ
Subscribe to the newsletter

All the news from Philippe Waechter’s blog in your mailbox


Loading
ABOUT PHILIPPE WAECHTER

Ostrum's expert magazine

ABOUT OSTRUM AM
  • About us
  • Media room
  • Our publications
  • Cookie Policy (EU)
FOLLOW ME ON
EXTERNAL LINKS
  • Economists
  • Think tank
  • Central banks
  • Blog roll
©Ostrum AM 2022
An affiliate of : Plan de travail 2

Input your search keywords and press Enter.

Manage Cookie Consent
We use cookies to optimize our website and our service.
Functional Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
Manage options Manage services Manage vendors Read more about these purposes
View preferences
{title} {title} {title}