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

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 →
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 →
Deen Albert in collared shirt superimposed on background showing a Grand Island Express blue tractor pulling a trailer, plus the HDT Truck Fleet Innovators 2026 logo
Fleet Managementby Deborah LockridgeAugust 17, 2026

Deen Albert: Let Automation Do the Math, People Make the Decisions

HDT Truck Fleet Innovator Deen Albert makes sure people are still at the heart of operations at Grand Island Express, even while adopting artificial intelligence tools. AI-assisted dispatch helped boost revenue 25% with the same number of trucks.

Read More →
Ad Loading...
Illustration of computer screen with Trimble Arc Agent screen
Fleet Managementby Deborah LockridgeAugust 14, 2026

Trimble’s New AI Agent Takes Aim at Fleet Back-Office Busywork

Arc Agent works across Trimble TMS products to automate repetitive tasks such as freight orders, maintenance, invoices, fuel costs and more.

Read More →
Photos of three men and two women with HDT Truck Fleet Innovators 2026 logo
Fleet ManagementCover Storyby Deborah LockridgeAugust 13, 2026

How HDT’s 2026 Truck Fleet Innovators Are Rethinking Fleet Operations

Meet five trucking leaders who are challenging assumptions, solving operational problems, and putting innovative ideas to work.

Read More →
Graph showing how contract rates and spot rates converged in July
Fleet Managementby StaffAugust 12, 2026

Tight Trucking Capacity Pushes Rates Higher Even as Freight Volumes Fall

“Spot rates moving ahead of contract rates have historically signaled a tightening market, but we haven’t seen a capacity-driven market quite like this one,” said DAT's Dean Croke.

Read More →
Ad Loading...
Line graph showing container import volumes
Fleet Managementby StaffAugust 7, 2026

Import Cargo’s Early Peak Season is Winding Down

There was an early start to peak season this year at the nation's gateway ports, as retailers brought in merchandise ahead of tariff changes in late July and responded to other supply chain uncertainties,

Read More →
Blue infographic with graphs illustrating cargo theft trends in the second quarter of 2026
Fleet Managementby Deborah LockridgeAugust 6, 2026

Fewer Cargo Thefts, Bigger Losses: Criminals Target Higher-Value Loads

CargoNet says organized theft rings are stealing fewer shipments but choosing more valuable freight, including metals and technology, resulting in record losses.

Read More →
Illustration of a chalkboard with a hand drawing an arrow curving away from a partially erased straight arrow with the words "Embracing Change," the Heavy Duty Trucking Logo and the "cover feature" graphic.
Fleet Managementby Deborah LockridgeAugust 1, 2026

How Innovative Trucking Leaders Turn Change Into an Advantage

As the pace of change accelerates in trucking, the fleets that adapt best have more than the latest technology. They have cultures that embrace improvement.

Read More →
Ad Loading...
Illustration of past due invoices with red X on top with background of a truck at a loading dock
Fleet ManagementJuly 27, 2026

Freight Broker Bonds Just Got Harder to Get. Here's What That Means for Your Fleet.

When it gets harder for a freight broker to prove they are financially sound, the ones who cannot clear that bar get pushed out of the market. And those are exactly the brokers who used to leave motor carriers holding the bag.

Read More →