- The increase in real GDP in the first quarter primarily reflected positive contributions from personal consumption expenditures (PCE) for services, private inventory investment, exports of goods and services, and federal government spending that were partly offset by negative contributions from residential fixed investment and PCE for durable goods. Imports, which are a subtraction in the calculation of GDP, increased.
Assuming that the numbers hold up through revisions, they indicate that the economy has not tipped over into recession.
One note with the numbers is that they appear to be strongly affected by changes in national defense spending, which increased 6 percent in the first quarter, compared to a slight decrease in the previous quarter. Inventories also grew, adding to short-term growth. Nearly every other indicator was weaker in the first quarter compared to the previous one.
Defense numbers aside, this shows why I never made it as a macroeconomist.
