Real gross domestic product ... increased at an annual rate of 0.1 percent in the first quarter..., according to the "advance" estimate released by the Bureau of Economic Analysis. ...The increase in real GDP in the first quarter primarily reflected a positive contribution from personal consumption expenditures (PCE) that was partly offset by negative contributions from exports, private inventory investment, nonresidential fixed investment, residential fixed investment, and state and local government spending. Imports, which are a subtraction in the calculation of GDP, decreased.
The advance Q1 GDP report, with 0.1% annualized growth, was below expectations of a 1.1% increase. Personal consumption expenditures (PCE) increased at a 3.0% annualized rate - a solid pace.
However the the change in inventories subtracted 0.57 percentage points from growth in Q1, exports subtracted 0.83 percentage points, and both non-residential and residential investment were negative. ... State and local governments subtracted from GDP in Q1.
Overall this was a weak report, although PCE growth was decent. Private investment (even excluding the change in inventories) was negative, and that is the key to more growth going forward.