The federal government said new economic data show Americans lowered, rather than increased, their spending on non-durable goods such as apparel and footwear in the first quarter.
In its third and final estimate of gross domestic product (GDP) for the first quarter, the U.S. Bureau of Economic Analysis (BEA) reported that personal consumption expenditures (PCE) on nondurable goods fell by 0.3 percent. In May, BEA had estimated U.S. consumers had increased their spending on nondurable goods by 2.9 percent during the quarter. Economists attributed the decline largely to harsh winter weather that kept many Northern U.S. residents from shopping.
The decline in personal consumption expenditures (PCE) was just one reason by the Bureau of Economic Research lowered its third and final estimate of real gross domestic product in the first quarter from a decline of 1.0 percent to a decline of 2.9 percent. That compared to a GDP increase of 2.6 percent in the fourth quarter of 2013.
The lower GDP estimate reflects additional data that showed the increase in PCE was lower than previously estimated, while the decline in exports was larger than previously estimated. The latest data show overall, real PCE increased 1.0 percent in the first quarter, compared with an increase of 3.3 percent in the fourth. That included a 1.2 percent increase in spending on durable goods, that more than offset the decline in nondurable goods.
