Hours: Monday - Friday 8:00 am - 5:00 pm


U.S. economy was a lot stronger in first quarter, final GDP estimate shows

REAL ECONOMY BLOG | June 29, 2023

Authored by RSM US LLP

The U.S. economy was stronger in the first quarter than previous estimates indicated, the Bureau of Economic Analysis reported on Thursday.

The third and final estimate of gross domestic product showed a drastic upward revision to a 2.0% gain from 1.3% on a quarterly and annualized basis. The increase was driven by a boost in personal spending, which was revised to a 4.2% increase from 3.8%.

Core inflation in the first quarter was revised down by 0.1 percentage point, to 4.9%, adding another factor that helped boost real GDP growth.


Robust consumer spending in the first quarter should add some pressure on the second quarter data just to keep up. Our GDP forecast remains at a 1.8% increase for the second quarter, which would represent a modest slowdown.

Another point of concern came from the discrepancy between GDP and gross domestic income, which fell by 1.8% in the first quarter, the second straight drop.

That highlighted how excess savings have been the biggest tailwind for robust spending since last year as income has not kept up with spending.

More data on spending and income is coming out on Friday, which should provide a much better sense of what the second quarter is heading toward. A marked slowdown in spending is expected for May’s number.

Jobless claims

In a separate report, initial jobless claims fell sharply to 239,000 from 265,000 last week, a holiday week. New claims are often hard to get a true measure on whenever a week is cut short by days off.

Although our advanced measure for new claims—the percentage difference between the three-month average and the 12-month low—fell to 20.2% from 21% earlier, the key threshold remained recessionary.

At the same time, continuing claims fell to 1.74 million from 1.76 million for the week ending June 17.

Jobless claims

The takeaway

Overall, Thursday’s data did not change our view in favor of the Federal Reserve raising its policy rate by another 25 basis points in July given how elevated inflation has been.

On Friday, we expect the top-line personal consumption expenditures index—one of the Fed’s key measures of inflation—to fall into the 3% range for the first time in two years, while the core index, which excludes food and energy prices, should remain above 4.5% on a year-ago basis, a lot stickier.

Let's Talk!

Call us at (325) 677-6251 or fill out the form below and we'll contact you to discuss your specific situation.

  • Topic Name:
  • Should be Empty:

This article was written by Tuan Nguyen and originally appeared on 2023-06-29.
2022 RSM US LLP. All rights reserved.

RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each is separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/about us for more information regarding RSM US LLP and RSM International. The RSM logo is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.

Condley and Company, LLP is a proud member of the RSM US Alliance, a premier affiliation of independent accounting and consulting firms in the United States. RSM US Alliance provides our firm with access to resources of RSM US LLP, the leading provider of audit, tax and consulting services focused on the middle market. RSM US LLP is a licensed CPA firm and the U.S. member of RSM International, a global network of independent audit, tax and consulting firms with more than 43,000 people in over 120 countries.

Our membership in RSM US Alliance has elevated our capabilities in the marketplace, helping to differentiate our firm from the competition while allowing us to maintain our independence and entrepreneurial culture. We have access to a valuable peer network of like-sized firms as well as a broad range of tools, expertise and technical resources.

For more information on how Condley and Company can assist you, please call (325) 677-6251.

Share This