In what can only be termed a disappointment, the Bureau of Economic Analysis (BEA) reported that real gross domestic product advanced at an annual rate of 2.2% during the 1st-quarter 2012. The entire BEA release can be accessed at the following link: http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

Particularly disappointing is the fact that real nonresidential fixed investment (business investment in equipment, structure, computers and software) actually declined at an annual rate of 2.1% during the quarter. Real nonresidential investment, a key driver of future growth and job creation, remains below its pre-recession level.

While the economy grew during the quarter, the recovery remains weak by historical standards. In the eleven quarters since the recession ended, the real GDP has grown at an average rate of 2.4%. This is less than half the 6.1% average rate for the eleven quarters following the last severe recession in the early 1980s.

Highlights

The increase in real GDP in the first quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, private inventory investment, and residential fixed investment that were partly offset by negative contributions from federal government spending, nonresidential fixed investment, and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased.

The deceleration in real GDP in the first quarter primarily reflected a deceleration in private inventory investment and a downturn in nonresidential fixed investment that were partly offset by accelerations in PCE and in exports.

• Real personal consumption expenditures increased 2.9 percent in the first quarter, compared with an increase of 2.1 percent in the fourth.

•Real nonresidential fixed investment decreased 2.1 percent in the first quarter, in contrast to an increase of 5.2 percent in the fourth. Real residential fixed investment increased 19.1 percent, compared with an increase of 11.6 percent.

•Real exports of goods and services increased 5.4 percent in the first quarter, compared with an increase of 2.7 percent in the fourth. Real imports of goods and services increased 4.3 percent, compared with an increase of 3.7 percent.

•Real federal government consumption expenditures and gross investment decreased 5.6 percent in the first quarter, compared with a decrease of 6.9 percent in the fourth. Real state and local government consumption expenditures and gross investment decreased 1.2 percent, compared with a decrease of 2.2 percent. (Note: Government Consumption and Investment does not include all government spending.)

•The change in real private inventories added 0.59 percentage point to the first-quarter change in real GDP after adding 1.81 percentage points to the fourth-quarter change. Private businesses increased inventories $69.5 billion in the first quarter, following an increase of $52.2 billion in the fourth quarter and a decrease of $2.0 billion in the third.

•The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 2.4 percent in the first quarter; excluding food and energy prices, the price index for gross domestic purchases increased 2.2 percent in the first quarter.