Problems Surface of Under-Reporting Q1 Expansion

Here we go again: The latest data show the U.S. economy plodding through another weak first quarter.  But it may not be coincidence. A detailed review by CNBC of 30 years of the government’s gross domestic product data, the most followed measure of U.S. growth, suggests a longstanding problem of under-reporting Q1 expansion.

Over some time periods, in fact, first quarter growth is so weak it appears to be measuring a different economy altogether compared to overall growth and the three other quarters. The discrepancy raises the issue of whether investors and policymakers should bet on a second quarter rebound. The government releases its initial estimate for first quarter GDP on April 29.

Over the past 30 years, first quarter growth has been by far the weakest of the four, averaging just 1.87 percent while the economy has grown 2.7 percent, according to the CNBC analysis. Several economists contacted by CNBC said if data were properly adjusted for seasonal variables, such a difference would not show up over a three decade span. They all found the results statistically significant.