Economists, who expected the third estimate would come in at 3.0%, are concerned about the continuing drop in real GDP, which measures the output of goods and services produced by labor and property located nationwide. In the fourth quarter of 2009, real GDP increased 5.6 percent.
According to the Bureau of Economic Analysis, the increase in real GDP in the first quarter primarily reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, exports, and nonresidential fixed investment. Those positive factors were partly offset by negative contributions from state and local government spending and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.
"The deceleration in real GDP in the first quarter primarily reflected decelerations in private inventory investment and in exports, a downturn in residential fixed investment, a deceleration in nonresidential fixed investment, and a larger decrease in state and local government spending that were partly offset by an acceleration in PCE," the Bureau said in a release.
While GDP around 3.0% indicates a modestly performing economy, it's not enough to spur job creation, analysts say.
The Commerce Department issues three estimates of each quarter's gross domestic product, the broadest measure of the economy's output.Read a story about the May 27 GDP report from the archives of InvestmentAdvisor.com.