Heavy Duty Trucking Logo
MenuMENU
SearchSEARCH

Economic Watch: GDP Stalls in First Quarter

Feelings that the American economy slowed to a crawl in the first quarter of the year were confirmed on Thursday morning when the Commerce Department released its report showing the gross domestic product increased at an annual rate of just 0.5%.

by Staff
April 28, 2016
Economic Watch: GDP Stalls in First Quarter

 

3 min to read


Feelings that the American economy slowed to a crawl in the first quarter of the year were confirmed on Thursday morning when the Commerce Department released its report showing the gross domestic product increased at an annual rate of just 0.5%.

This first estimate of this widest measure of economic activity is the worst performance in two years and fell short of a 0.7% first quarter annual rate expected by Wall Street.

Ad Loading...

It follows a rate of 1.4% in the fourth quarter of 2015. For all of last year, the GDP expanded at a 2.4% pace.

Two more first quarter GDP estimates, based on more complete data, are set for release over two months with the next coming on May 27.

According to this first-estimate report, the GDP in the first quarter showed positive contributions in the form of personal spending, which increased at a 1.9% rate, along with residential fixed investment and state and local government spending.

Ad Loading...

It was partly offset by a 5.9% decline in nonresidential fixed investment, a gauge of business spending and the biggest drop since the Great Recession. Other declines affecting the disappointing GDP numbers were private inventory investment, exports, and federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.

American Trucking Associations Chief Economist Bob Costello pointed out in a tweet that a reduction in inventories took 0.33 percentage points off of first-quarter GDP. "Still more to go before inventories are corrected though," he said. Overly high inventories has been a thorn in trucking's side, as there is less freight to haul to replace those inventories.

The first quarter results were not surprising following reports of slower manufacturing activity and weak retail sales in January through March, the high value of the dollar relative to foreign currencies, and less freight for trucking companies to move.

This latest performance also follows slow starts the previous two years. The first quarter GDP in 2014 contracted and in 2015 it barely posted any growth. However, conditions bounced back later in both years. In fact, from 2010 through 2015, first-quarter GDP growth averaged just 0.8% compared with 3.1% for the second quarter, 2.2% in the third quarter and 2.4% for the fourth quarter, according to the Wall Street Journal.

“We expect that the slowing in overall GDP growth in the last two quarters will ultimately prove transitory."

“We expect that the slowing in overall GDP growth in the last two quarters will ultimately prove transitory, with our forecast assuming a return to above-trend growth beginning in the current quarter,” said Nathan Janzen, Senior Economist at RBC Economics.

Ad Loading...

“With inflation and the unemployment rate both already tracking close to the Federal Reserve’s objectives, we expect that improved growth will ultimately prompt further increases in interest rates, although our current outlook does not assume the next hike in the fed funds target range until the fourth quarter of this year.”


More Fleet Management

A woman holding a tablet with a screen showing rectangles of various colors
SponsoredSeptember 16, 2026

Color Match Smarter: Tools That Restore & Perform

For fleet managers and collision repair professionals keeping heavy-duty trucks on the road, getting the color right the first time isn't just about appearance — it's about efficiency, turnaround time, and bottom-line results. Discover how today's digital color tools are transforming the repair process from guesswork to precision.

Read More →
Mobile tablet showing Motus screen against highway background with Motus logo
Fleet Managementby StaffSeptember 15, 2026

FMCSA Pauses Biennial-Update Enforcement Amid Motus Transition

Carriers whose updates were due on or after June 1 have more time, while FMCSA works to stabilize its new registration system and warns of phishing sites impersonating its new carrier registration system, Motus.

Read More →
Geotab Whitepaper Cargo Theft Cover
SponsoredSeptember 14, 2026

2026 Blueprint for Countering Smarter Supply Chain Theft

Cargo theft is no longer just the cost of doing business. It's a multi-billion-dollar criminal enterprise exploiting vulnerabilities across your fleet, drivers, and supply chain.

Read More →
Ad Loading...
A monitor with a bar graph with a person sitting next to it wearing a headset.
SponsoredSeptember 1, 2026

How Telematics Improves Visibility, Control, and Performance in Refrigerated Fleets

Explore how telematics help refrigerated fleets improve visibility, uptime, efficiency, compliance, and cargo protection across connected cold chain operations.

Read More →
Graphic with U.S. and Canadian flags over background illustration of an ink-stamp that says Tariffs.
Equipmentby Deborah LockridgeAugust 24, 2026

What the U.S.-Canada Trade War Means for Trucking

Escalating U.S.-Canada tariffs could disrupt cross-border freight, reduce truck volumes, raise costs, and create new uncertainty for carriers on both sides of the border.

Read More →
Fleet Managementby News/Media ReleaseAugust 24, 2026

What Are Trucking’s Top Concerns for 2026?

The American Transportation Research Institute wants to know what's worrying trucking fleet managers, drivers, and other stakeholders in its annual Industry Issues survey.

Read More →
Ad Loading...
Four men in suits on the National Mall with giant video screen showing capitol building in the background
Fleet Managementby Deborah LockridgeAugust 24, 2026

American Trucking Associations Looks for a New Leader

ATA President and CEO Chris Spear abruptly left his job at the association on August 21, at a pivotal time for the trucking industry.

Read More →
The Cyber Stop column header with photo of a smiling driver in truck with a laptop and a wi-fi icon
Fleet ManagementAugust 21, 2026

Public Wi-Fi Cybersecurity Risks: How Truck Drivers and Fleets Can Protect Their Data

Public Wi-Fi can expose truck drivers and fleets to credential theft, malware, and other cyber threats. Here’s how to reduce the risk on the road.

Read More →
Woman in white blazer superimposed on background showing a row of Fraley & Schilling truck, plus the HDT Truck Fleet Innovators 2026 logo
Fleet Managementby Deborah LockridgeAugust 19, 2026

For Nicky Cupp, Fleet Innovation Starts With Frustration

HDT Truck Fleet Innovator Nicky Cupp turns everyday pain points at Fraley & Schilling into opportunities for better technology and smarter processes.

Read More →
Ad Loading...
Headshot of Adam Buttgenbach with a Pepsi-branded Tesla Semi in the background
Fleet Managementby Deborah LockridgeAugust 18, 2026

Adam Buttgenbach’s Approach to Electric Trucks: Start With Where They Fit

HDT Truck Fleet Innovator Adam Buttgenbach helped PepsiCo build one of North America’s largest EV fleets by focusing on where electric trucks make operational sense.

Read More →