U.S. spending on food soared in 1Q as Americans prepared to hunker down
Consumption is forecast to be much weaker in the second quarter because broader government measures including closures of restaurants and stores didn’t start in earnest until mid-to-late March, and they continue today in much of the U.S.
Business investment, already down for three straight quarters as the U.S.-China trade war kept companies guessing, also took a big hit. Companies slowed spending on structures and equipment. Investment in software rose, however, potentially reflecting efforts to help employees work from home.
Exports of services fell by the most since 1975, reflecting a decline in international travelers coming to the U.S.
The first-quarter GDP figures will be revised several times, and some economists broadly expect the reading to become weaker as more data and adjustments are made.
The Commerce Department also made some adjustments to how it estimated wages and salaries, since the data source usually used covered the period before the major coronavirus issues. Statisticians incorporated unemployment claims, which surged to records in recent weeks, and also assumed additional job losses not reflected in the filings.