April 27, 2012

Real gross domestic product (GDP) increased 2.2 percent in the first quarter of 2012 after increasing 3.0 percent in the fourth quarter of 2011, according to estimates released today by the U.S. Bureau of Economic Analysis.

First-quarter highlights
The slower economic growth reflected slower growth in inventory and fixed investment by businesses:

  • The deceleration in inventory investment was primarily due to reduced inventory investment in manufacturing and in wholesale industries. In contrast, inventory investment in retail industries increased, especially in motor vehicles and parts.
  • The slower growth in fixed investment was mainly due to slowdowns in industrial equipment, in computer and related equipment, and in power and communication structures. These contributions to slower growth in GDP were partly offset by faster growth in consumer spending, mainly for services, and in services exports.

Prices of goods and services purchased by U.S. residents rose 2.4 percent after rising 1.1 percent. Energy prices turned up, while food prices slowed. Prices, excluding food and energy, rose 2.2 percent after rising 1.2 percent.

Personal income
Real disposable personal income—which adjusts personal income for changes in consumer prices and taxes—rose 0.4 percent in the first quarter versus 1.7 percent in the fourth quarter. The slower growth mainly reflected a 2.4 percent rise in consumer prices in the first quarter versus a 1.2 percent rise in the fourth quarter.

Personal saving
The personal saving rate—saving as a percentage of disposable personal income—was 3.9 percent in the first quarter, compared with 4.5 percent in the fourth quarter. The first-quarter saving rate was the lowest since the fourth quarter of 2007.

To learn more about GDP, read the full report.