Economy Watch: U.S. GDP Edges Up in Q1

A 1.4 percent increase in U.S. real GDP for the first quarter of the year was down from the growth seen in the fourth quarter of 2016, according to the Bureau of Economic Analysis. But consumers remain confident about the state of the U.S. economy.

Source: Bureau of Economic Analysis
Source: U.S. Bureau of Economic Analysis

Real U.S. gross domestic product increased at an annualized rate of 1.4 percent in the first quarter of 2017, according to the third (and final) estimate by the Bureau of Economic Analysis, which was released on Thursday. In the fourth quarter of 2016, real GDP increased 2.1 percent.

The latest GDP estimate is based on more complete source data than were available for the second estimate issued last month, which reported the increase in real GDP at 1.2 percent. With the third estimate for the first quarter, personal consumption and exports increased more than previously estimated, but the general picture of economic growth remains the same—tepid.

Consumers stay confident

Even so, consumers are still relatively optimistic about the state of the economy, which is probably good news for the beleaguered retail sector. The Conference Board’s Consumer Confidence Index, which had decreased in May, increased moderately in June, according to that organization this week.

The Index now stands at 118.9 (1985 = 100), up from 117.6 in May. The Present Situation Index increased from 140.6 to 146.3, while the Expectations Index dropped from 102.3 last month to 100.6. Those consumers who say business conditions are “good” increased from 29.8 percent to 30.8 percent, while those saying business conditions are “bad” declined from 13.9 percent to 12.7 percent.