U.S. gross domestic product increased 1.2 percent, according to the Bureau of Economic Analysis. The second estimate was revised upward from an advance estimate of 0.7 percent.
While the first-quarter economic picture is slightly rosier than it initially appeared, U.S. GDP is still showing a marked deceleration from the 2.1 percent growth recorded in fourth quarter 2016.
The quarter saw positive contributions from nonresidential fixed investment, residential fixed investment, exports and personal consumption expenditures, but these were offset by negative contributions from private inventory investment, state and local government spending, and federal government spending.
The second quarter is forecast to have stronger GDP growth than the first quarter, according to the recently released minutes of the May meeting of the Federal Open Market Committee. The minutes note: “In the U.S. economic forecast prepared by the staff for the May FOMC meeting, real GDP growth was projected to bounce back in the second quarter from its weak first-quarter reading. The staff judged that the weakness in first-quarter real GDP was probably not attributable to residual seasonality and that it instead reflected transitorily soft consumer expenditures and inventory investment.”