GDP Advance Q1 Estimatesshow GDP increased by 3.2%, less than the expected 3.4% increase, after increasing by 5.6% in the fourth quarter and by 2.2% in the third quarter of 2009. However, real personal consumption expenditures rose by 3.6%, compared to the 1.6% gain in the preceding three months. The increase in consumer spending was the largest since the first quarter of 2007, raising hopes of a sustainable recovery. The increase in real GDP in the first quarter primarily reflected positive contributions from personal consumption expenditures, private inventory investment, exportsand nonresidential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased. The deceleration in real GDP in the first quarter primarily reflected decelerations in private inventory investment and in exports, a downturn in residential fixed investment, and a larger decrease in state and local government spending that were partly offset by an acceleration in PCE and a deceleration in imports.

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