A second GDP estimate was released for the first quarter of 2024, with real GDP rising at an annual rate of 1.3%, according to the Bureau of Economic Analysis. This estimate indicates a slowdown in the pace of economic growth compared to the fourth quarter of 2023, which recorded an increase of 3.4%. The current estimate update is based on more complete data than the data available in the previous estimate, which had shown an increase in real GDP of 1.6%. This update was primarily due to a downward revision in consumer spending.
The increase in real GDP in this estimate may reflect increases in consumer spending, residential fixed investment, nonresidential fixed investment, and state and local government spending. These increases were partially offset by lower investment in private inventory. Imports also increased in this context. It is worth noting that this data reflects the state of the economy in the specified time period and depends on several economic factors such as spending, investment, and foreign trade.
Updates to GDP: With the second estimate, downward revisions to consumer spending, private inventory investment, and federal government spending were partially offset by upward revisions to state and local government spending, nonresidential fixed investment, residential fixed investment, and exports. Imports were reviewed
This data holds some lessons and challenges. For example, a slowdown in the growth rate indicates the need to review economic policies to promote economic growth. We must also consider the effects of global events on our local economies and take measures to adapt to them. Ultimately, expectations remain futuristic and depend on several factors, including developments in global events and internal policies. However, careful analysis and sound policy measures can contribute to enhancing the health and stability of our economy in the future.
Data for the first quarter of 2024
Data for the first quarter of 2024 reflect tangible changes in several aspects of the country’s economy compared to the fourth quarter of the previous year. In this context, it is clear that the slowdown in real GDP in the first quarter mainly reflects movements in various economic sectors.
First, the slowdown in consumer spending indicates a possible decline in the strength of internal demand, which could be the result of various factors such as changes in the level of income or consumer confidence. The decline in exports also reflects potential challenges in the global market or changes in trade exchange between countries.
Second, changes in state and local government spending and declines in federal government spending reflect movements in government policies and spending trends, and this can directly affect GDP.
With regard to investments, the acceleration in fixed residential investment indicates the continued strength of the real estate sector and continued interest in it as a main source of economic growth. As for imports, their acceleration reflects increasing dependence on external resources, which has both positive and negative effects on the local economy. Regarding the new estimates of GDP in current dollars, the downward revision indicates that previous expectations may have been slightly exaggerated, which shows the importance of carefully analyzing the data to avoid wrong decisions or excessive expectations.
This data may reflect changes in several aspects of the economy, and highlights the need for continuous monitoring and careful analysis to ensure a deeper understanding of economic trends and take appropriate decisions to support growth and economic stability.
Updates for Fourth Quarter Wages and Salaries In addition to providing updated estimates for the first quarter, today’s release provides revised estimates for fourth quarter wages and salaries, personal taxes, and state Social Security contributions.
Price indicators updates
Price index updates reflect important changes in purchasing and consumption costs during the first quarter of 2024, which could affect consumer behavior and general inflation. Let’s take a look at these updates:
1. Price Index for Total Domestic Purchases: It rose by 3.0%, a downward revision of a percentage point from the previous estimate. This rise is an indicator of increased public procurement costs and can reflect price changes for several factors such as production costs and demand.
2. Personal Consumption Expenditures (PCE) Price Index: It rose by 3.3%, which is also a downward revision from the previous estimate of one percentage point. This rise reflects rising personal consumption costs, and includes reforms in food and energy prices.
3. Personal Consumption Expenditures Price Index Excluding Food and Energy (PCE Excluding Food and Energy)**: It rose by 3.6%, indicating that inflation is not limited only to basic goods. It is also a downward revision from the previous estimate of a percentage point. These updates show that general inflation has seen small but significant adjustments, indicating changes in the prices of various goods and services. These updates should be carefully monitored to understand their impact on the overall economy, and could affect central bank policies and future consumption and investment trends.
. It is now estimated that current personal taxes have increased by $27.1 billion, a downward revision of $12.6 billion. It is now estimated that contributions to government social insurance have increased by $8.3 billion, a downward revision of $9.6 billion. Integrating this new data, real GDP is now estimated to have increased by 3.6 percent in the fourth quarter, a downward revision of 1.2 percentage points from previously published estimates.
New data on personal income
New data on personal income indicate important developments:
1. Increase in personal income: Increased by $404.4 billion, a slight downward revision from the previous estimate. This rise in personal income is primarily attributable to increases in compensation such as private wages and salaries, as well as current personal transfer revenues such as government social benefits.
2. Disposable personal income: It increased by $266.7 billion, or 5.3%, which is an upward revision from the previous estimate. Real disposable personal income increased by 1.9%, reflecting the strength of personal income after taking into account inflation.
3. Personal Savings: Increased by $796.6 billion, an upward revision from the previous estimate. The personal saving rate as a proportion of disposable personal income reached 3.8% in the first quarter, an upward revision indicating an increase in the saving rate.
These updates reflect an increase in the strength of personal income and saving capacity, which can reflect positively on personal consumption and the stability of the personal economy. However, future trends in personal income and saving must be monitored to understand challenges and opportunities that may face individuals and economy in general.
In the first quarter of the year, a rise in real GDP was recorded at 1.5%, which is a much lower rise compared to the increase of 3.6% in previous quarter. This increase indicates a slowdown in the pace of economic growth during this period. However, average real GDP and real gross income index rose by 1.4%, indicating continued economic activity in general.
On the other hand, corporate profits saw a decline in the first quarter, with current production profits falling by $21.1 billion compared to previous increase in the fourth quarter. In this context, local financial companies saw an increase in profits while non-financial companies saw a decrease in profits.
