The nation’s real gross domestic product (GDP), the output of goods and services within the country, increased at an annual rate of 4.2% in the first quarter, according to the Bureau of Economic Analysis. The annual growth rate was up slightly from the previous quarter’s 4.1% rate.
Personal consumption expenditures grew 2.65%, reflecting a 1.28% increase in nondurable goods as consumers bought more food and clothes and a 1.77% increase in services such as medical care. Consumers held off on big-ticket items such as motor vehicles, furniture and household equipment, however, as durable goods dipped 0.4%.
Gross private domestic investment rose 1.12%, suggesting businesses are continuing to spend on equipment and software, with a 0.88% increase; and consumers continued to buy homes, with a 0.11% residential increase.
Government spending increased 0.37% as federal expenditures rose 0.67%. Spending for national defense increased 0.66% and nondefense spending remained relatively stagnant, with a 0.02% rise. State and local governments demonstrated fiscal restraint as spending dropped 0.3%.
Net exports of goods and services, spurred by the weak dollar, rose 0.02%. Exports gained while imports— a subtraction in calculating GDP— dropped.