Advance Estimate of GDP for the First Quarter of 2014

Today’s GDP estimate is subject to a number of notable influences, including historically severe winter weather, which temporarily lowered growth in the first quarter. The report also shows the positive impact of the implementation of the Affordable Care Act which, together with continued slowing in health costs, helped strengthen the economy in the first quarter. The President will do everything he can either by acting through executive action or by working with Congress to push for steps that would raise growth and accelerate job creation, including fully paid-for investments in infrastructure, education and research, a reinstatement of extended unemployment insurance benefits, and an increase in the minimum wage.

FIVE KEY POINTS IN TODAY’S REPORT FROM THE BUREAU OF ECONOMIC ANALYSIS

1. Real gross domestic product (GDP) rose 0.1 percent at an annual rate in the first quarter of 2014, following the 3.4 percent annual pace in the second half of 2013.

2. The first quarter of 2014 was marked by unusually severe winter weather, including record cold temperatures and snowstorms, which explains part of the difference in GDP growth relative to previous quarters.

3. Within the first quarter, several key indicators were lower in January and/or February before rebounding strongly in March, suggesting that the severe weather had a disruptive effect that only began to abate at the end of the quarter.

4. The federal sector made a small positive contribution to growth for the first time in over a year, in part because the effect of the shutdown in the fourth quarter reversed.

5. Health care prices continued to increase exceptionally slowly, growing at an annual rate of just 0.5 percent (0.9 percent on a year-over-year basis), while utilization (real health care spending) rose at a 9.9 percent annual rate in the first quarter.

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