The Commerce Department reported Friday that real gross domestic product (GDP) expanded in the first quarter of 2019, beating expectations and relieving concerns that the U.S. economy is slowing.
U.S. GDP expanded at a 3.2% in the first quarter of 2019, following a 2.2% increase in the final quarter of 2018, bolstered by a surge in exports and diminishing imports as well as a boost in technology investments, including software, intellectual property, and R&D.
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Economists had expected a 2.5% rate in growth for the 1st quarter. It was the best quarter for the U.S. economy since 2015
Exports, defense spending increase
Exports surged 3.7% in the first quarter, while imports decreased 3.7%, reports the Commerce Department.
Many of the nation’s exporters, eyeing accelerating trade tensions, are delivering their products as quickly as possible while the U.S. and China continue to hash out a trade deal.
Current-dollar GDP rose 3.8% in the first quarter of 2019, according to the Commerce Department, amounting to a $197.6 billion increase, to its current level of $21.06 trillion.
National defense spending increased 4.1% in the first quarter, following a 6.4% increase in the last quarter of 2018. State and local spending increased 3.9%.
Prices appeared to stabilize in the first quarter, with the gross domestic purchase index up 0.8%., compared to a 1.7% increase in fourth quarter.
An overall increase in gross private domestic investment was centered around a 19.5% increase in intellectual property products, while software investment climbed 13.5%. Companies invested in research & development, which moved up 5.3%, as well as industrial equipment, which climbed 0.8%.
Manufacturing growth numbers mixed
In April, a number of reports mixed signals for U.S. manufacturing, including a discouraging Labor Department report, which finds that jobs in the sector decreased for the first time in several years, down 6,000 jobs in March.
Adding to this the Federal Reserve found that U.S. manufacturing output stalled last month.
Related: Where is U.S. Manufacturing Headed?
However, the Institute for Supply Management (ISM) continues to report that U.S. manufactures are in expansion mode, with their reading on factory activity coming in at a robust 55.5%, while IndustryNet reported solid growth numbers in the hydraulics and compressor industries as well as some surprise employment gains in East Coast states like New Jersey and Rhode Island.
Washington State leads nation’s GDP growth
The Commerce Department cited increased investments on a state and local government as driving up GDP.
Looking at growth in the last quarter of 2018, Washington State continues to lead the nation’s GDP gains, with a 5.8% increase in GDP, followed by Utah, with 4.4% increase, and Nevada with a 4.1% gain.
States with the lowest GDP growth were mostly concentrated in the South, with Louisiana; Mississippi; Arkansas; and North Carolina posting growth of 1.8-1.9% West Virginia was the only state to remain flat, breaking even at 0% GDP growth.
Stay tuned for the next breakdown of state-by-state GDP in May.
Source: U.S. Bureau of Economic Analysis (BEA)
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