Real gross domestic product (GDP) decreased at an annual rate of 4.8% in the first quarter of 2020, according to the "advance" estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2019, real GDP increased 2.1%.
The GDP estimate released today is based on source data that are incomplete or subject to further revision by the source agency. The "second" estimate for the first quarter, based on more complete data, will be released on May 28, 2020.
The decline in first quarter GDP was, in part, due to the response to the spread of COVID-19, as governments issued "stay-at-home" orders in March. This led to rapid changes in demand, as businesses and schools switched to remote work or canceled operations, and consumers canceled, restricted or redirected their spending. The full economic effects of the COVID-19 pandemic cannot be quantified in the GDP estimate for the first quarter of 2020 because the impacts are generally embedded in source data and cannot be separately identified. For more information, see the Technical Note
The decrease in real GDP in the first quarter reflected negative contributions from personal consumption expenditures (PCE), nonresidential fixed investment, exports and private inventory investment that were partly offset by positive contributions from residential fixed investment, federal government spending, and state and local government spending. Imports, which are a subtraction in the calculation of GDP, decreased.
The decrease in PCE reflected decreases in services, led by health care, and goods, led by motor vehicles and parts. The decrease in nonresidential fixed investment primarily reflected a decrease in equipment, led by transportation equipment. The decrease in exports primarily reflected a decrease in services, led by travel.
Current‑dollar GDP decreased 3.5%, or $191.2 billion, in the first quarter to a level of $21.5 trillion. In the fourth quarter, GDP increased 3.5%, or $186.6 billion.
The price index for gross domestic purchases increased 1.6% in the first quarter, compared with an increase of 1.4% in the fourth quarter. The PCE price index increased 1.3%, compared with an increase of 1.4%. Excluding food and energy prices, the PCE price index increased 1.8%, compared with an increase of 1.3%.