Wednesday, April 29, 2009

GDP Declines 6.1% in Q1

by Bill McBride on 4/29/2009 08:32:00 AM

From the BEA: Gross Domestic Product: First Quarter 2009 (Advance)

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- decreased at an annual rate of 6.1 percent in the first quarter of 2009 ...

Real personal consumption expenditures increased 2.2 percent in the first quarter, in contrast to a decrease of 4.3 percent in the fourth. ...

Real nonresidential fixed investment decreased 37.9 percent in the first quarter ...

Nonresidential structures decreased 44.2 percent ...

Equipment and software decreased 33.8 percent ...

Real residential fixed investment decreased 38.0 percent ...
So PCE increased (as expected), but investment slumped sharply in all categories.

From Rex Nutting at MarketWatch: GDP falls 6.1% on record drop in investment
The two-quarter contraction is the worst in more than 60 years. The big story for the first quarter was in the business sector, where firms halted new investments, and shed workers and inventories at a dizzying pace ...
For the stress tests, the baseline scenario for Q1 was minus 5.0%, and the more adverse scenario was minus 6.9%, so, before revisions, Q1 is between the two scenarios. More to come ...