75% Of US GDP Growth In The First Quarter Was Due To AI
ZeroHedge ·
75% Of US GDP Growth In The First Quarter Was Due To AI On the surface, today's final revision (aka 3rd estimate) of the US Q1 GDP print was unremarkable: Real GDP grew 2.1% annualized in the first quarter, a reversal of last month's downward revision of 1.6%, but back to where the original print was when it was reported in April, when the BEA reported 2.0% growth. The print reflected a downward revision to imports, which are a subtraction in the calculation of GDP, that was partly offset by a sharp downward revision to consumer spending. Taking a closer look at the components, net exports contribution being revised sharply higher to -0.4% from -1.3% previously drove the improvement while consumption was much weaker. Real personal consumption expenditures revised sharply lower to 0.5% (saar) from 1.4% (saar) . This is unexpected as virtually everyone was convinced that bumper tax rebates from Trump's OBBBA "stimulus" would push Q1 personal spending; in retrospect, spending in Q1 was far weaker than expected. That said, real spending in May climbed 0.3% (3.2% annualized), while April was revised to 0% from 0.1%. This suggests an okay pace of spending but not boomy across the two months (1.6% annualized) considering bumper tax refunds putting extra money in people's pockets. Yet, as before, when we get to fixed investment, something remarkable emerges: Residential housing investment declined 1.7% and subtracted 0.3% from the bottom line GDP print . This was the 5th consecutive decline as residential investment has declined, and 7th of the past 8 quarters. To be expected at a time of rising interest rates. But Nonresidential fixed investment was the outlier, soaring by 8%, and responsible for 1.42% of the 2.1% bottom line print . Let's take a closer look at the breakdown. The chart below shows quarterly annualized GDP growth broken down by components. It shows that Q1 GDP grew at exactly 2.100% in Q1. Also notable is that traditionally strong consumption, added just 0.
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