The Commerce Department released its first estimate of GDP growth for the first quarter of 2013 this morning, and we seem to have settled into a new normal, with the annual growth rate coming in at a somewhat modest 2.5 percent. The good news is that sequestration and the increase in the payroll tax don't seem to have had a huge effect on economic growth yet.
The largest driver of that growth was consumer spending, which rose a solid 3.2 percent in the quarter. That's the biggest increase we've seen since the last quarter of 2010. One area for concern was nonresidential fixed investment, which is mostly long-term business investments. Those increased by 2.1 percent in the quarter, which was positive but also a sharp slowdown from the 13.2 percent increase we had seen in the previous three quarters.
This is just the first estimate, and it will be revised as more figures come in. Look for a revision of these numbers to be issued by the Commerce Department on May 30.
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