Weak Headline Masks Underlying Resilience in First Quarter GDP

Real gross domestic product fell at a 1.4 percent annualized rate in the first quarter versus a 6.9 percent rate of gain in the fourth quarter. Over the past four quarters, real gross domestic product is up 3.6 percent, putting the level almost exactly on trend (see first chart).

Real final sales to private domestic purchasers, a key measure of private domestic demand, rose at a more robust 3.7 percent annualized rate in the first quarter following a 2.6 percent pace in the fourth quarter. Over the last four quarters, real final sales to private domestic purchasers are up 4.4 percent, keeping the level slightly above trend (see first chart). The trend growth in real final sales to private domestic purchasers is 2.6 percent since mid-2009.