WASHINGTON – Real gross domestic product increased 2.7% at an annual rate in the first quarter of 2010, revised down from the 3.0% gain reported last month, as consumer spending was revised lower and imports were revised higher, the Commerce Department reported today.
The core personal consumption expenditures figure edged up, revised to a 0.7% increase from 0.6% reported last month.
The report is the third and final quarterly GDP estimate for the first quarter of 2010, which ended March 31.
Consumer spending, which accounts for about 70% of GDP, increased 3.0% in the first quarter, down from 3.5% reported last month in the preliminary revision.
The lower figure reflects new data from the Census Bureau’s services survey, which tracks about 16% personal consumption for hospital, legal service and software and other service expenditures. The services survey data first become available for the third quarterly GDP revision. Consumer spending was also lower because of new data on natural gas usage.
Consumer spending added 2.13 percentage points to GDP in this revision, down from 2.42 percentage points in the preliminary GDP revision.
Imports were revised higher to $2,251.5 billion from $2,228.7 billion, and the trade deficit was revised higher to $505.4 billion. Exports were also revised higher to $1,746.1 billion from $1,729.3 billion. The trade deficit subtracted 0.82 percentage point from GDP, up from a 0.66 percentage point subtraction reported last month.
Economists expected no change to the previous 3.0% GDP estimate, according to the median estimate from Thomson Reuters. GDP increased 5.6% in the fourth quarter of 2009 and fell 2.4% for all of 2009.
Economists were expecting a 0.6% core PCE increase for the first quarter. The 0.7% rise in the core PCE was the smallest core PCE increase since records began in 1959.
Gross private domestic investment was revised higher to a 16.3% annual increase in the first quarter, up from 14.7% in the estimate last month. An increase in inventory restocking added 1.88 percentage points to GDP, revised higher from 1.65 percentage points in the prior estimate.
Corporate profits were revised higher, increasing by $116.9 billion, or 8.0%, in the first quarter. The preliminary GDP estimate reported an $81.4 billion corporate profit gain.
State and local government spending contracted 3.8% in the first quarter, the largest decline since the second quarter of 1981.
