Economic Growth Weakens in the First Quarter

2023-04-27T14:15:29-05:00

In the first quarter of 2023, economic growth slowed to an annual rate of 1.1%, amid rising interest rates and an ongoing banking crisis. This quarter’s growth was dragged down by decreases in private inventory investment and residential fixed investment. Private inventory investment subtracted 2.26 percentage points off the headline growth rate for overall GDP, while residential fixed investment took 0.17 percentage points off the headline number. Meanwhile, the GDP price index rose 4.0% for the first quarter, up from a 3.9% increase in the fourth quarter. The Personal Consumption Expenditures (PCE) price Index, capturing inflation (or deflation) across a wide range of consumer expenses and reflecting changes in consumer behavior, rose 4.2% in the first quarter, compared with a 3.7% increase in the fourth quarter of 2022. Looking forward, only a mild recession is expected for this cycle due to the Federal Reserve tightening financial conditions. According to the “advance” estimate  released by the Bureau of Economic Analysis (BEA), real gross domestic product (GDP) increased at an annual rate of 1.1% in the first quarter of 2023. It was down from a 2.6% increase in the fourth quarter of 2022 and marks the lowest growth rate in the past three quarters. This quarter’s growth was close to NAHB’s forecast of a 1.0% increase. This quarter’s increase reflected increases in consumer spending, exports, government spending, and nonresidential fixed investment, partially offset by decreases in private inventory investment and residential fixed investment. Consumer spending rose at an annual rate of 3.7% in the first quarter, reflecting increases in both services and goods. While expenditures on services increased 2.3% at an annual rate, goods spending increased 6.5% at an annual rate, led by motor vehicles and parts (+45.3%). This quarter’s increase in exports reflected an increase in goods that was partly offset by a decrease in services. Meanwhile, federal government spending increased 4.7% in the first quarter, led by an increase in nondefense spending, while state and local government spending rose 2.3%, led by an increase in compensation of state and local government employees. Nonresidential fixed investment increased 0.7% in the first quarter, down from a 4.0% increase in the fourth quarter. Additionally, residential fixed investment (RFI) decreased 4.2% in the first quarter. This was the eighth consecutive quarter for which RFI subtracted from the headline growth rate for overall GDP. Within residential fixed investment, single-family structures declined 20.7% at an annual rate, multifamily structures rose 10.1% and other structures (specifically brokers’ commissions) increased 6.3%. Related ‹ Housing Availability Expectations See Mild ImprovementHousing Share of GDP Lower in the First Quarter of 2023 ›Tags: economics, gdp, inflation, macroeconomics, macroeconomy, residential fixed investment

Economic Growth Weakens in the First Quarter2023-04-27T14:15:29-05:00

2022 State-Level GDP Data

2023-03-31T13:15:31-05:00

Real gross domestic product (GDP) increased in all 42 states and the District of Columbia in 2022 according to the U.S. Bureau of Economic Analysis (BEA). Six states recorded declines while Maryland and New Hampshire reported no change. The percent change in real GDP ranged from 4.9 percent increase in Idaho to 2.4 percent decline in Alaska. Nationwide, growth in real GDP, measured on a seasonally adjusted annual rate basis, increased 2.1 percent in 2022, after a strong 2021 (+5.9 percent). Professional, scientific, and technical services; information; and real estate and rental and leasing were the leading contributors to the increase in real GDP across the country. Regionally, real GDP growth increased in all the regions between 2021 and 2022. The percent change in real GDP ranged from 3.0 percent increase in the Rocky Mountain region (Colorado, Idaho, Montana, Utah, and Wyoming) to 0.8 percent increase in the Far West region (Alaska, California, Hawaii, Nevada, Oregon, and Washington) and the Plains region (Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota). Overall, 15 out of 21 industry groups contributing to the increase in real GDP. Arts, entertainment, and recreation; administrative and support and waste management; and information services were the leading contributors the increase in real GDP in 2022.  Construction sector was the biggest drag on the economy in 2022. At the state level, real estate and rental and leasing industry was the leading contributor to the real GDP increase in Idaho, the state with the largest increase. Following Idaho, Tennessee, Florida, Nevada, and Texas had the top five increases in real GDP in 2022.  Alaska, Louisiana, Iowa, North Dakota, Oklahoma, and Wyoming saw real GDP decline last year. Related ‹ Distribution of 1-4 Unit Residential Construction Loans Among Banks by Asset SizeTags: gdp, macroeconomics, state and local markets, state GDP

2022 State-Level GDP Data2023-03-31T13:15:31-05:00
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