The U.S. economy grew at an annualized 2.1% in the first quarter of this year (January–March), according to the final tally. That tops both the initial advance estimate (1.6%) and the market forecast (1.6%).
The Bureau of Economic Analysis (BEA) said on the 25th (local time) that the finalized first-quarter real gross domestic product (GDP) growth rate was 2.1% at an annualized rate from the previous quarter. On a non-annualized basis, it rose 0.5% from the prior quarter.
Unlike Korea, the United States releases GDP using the "annualized quarter-over-quarter" method, which converts quarterly growth to an annual basis.
This upward revision to the growth rate is analyzed as reflecting a larger-than-expected drop in imports. Because imports are a subtractive item in GDP calculations, the downward revision in import volumes lifted the growth rate.
The first-quarter growth rate was initially tallied at 1.6% when the advance estimate was released, then was revised up by 0.5 percentage points to 2.1% in the final estimate. Compared with the prior quarter, the fourth quarter of last year (annualized 0.5%), the growth trend appears to have improved significantly.
By detailed category, private investment made the largest contribution, adding 1.35 percentage points to growth. Government spending and private consumption each raised growth by 0.74 percentage points and 0.37 percentage points, respectively. In contrast, the trade institutional sector pulled growth down by 0.37 percentage points, weighing on the overall rate.
Meanwhile, nominal GDP in the first quarter rose 5.8% at an annualized rate, and the personal consumption expenditures (PCE) price index, an inflation gauge, climbed 4.6% at an annualized rate.