Q1 GDP (2nd Estimate): Slight Upward Revision

May 27, 2016
Bottom Line: Economic activity expanded by 0.8% compared to 0.5% as previously estimated in 2016 Q1. In final sales categories, net exports, residential investment and consumption were revised slightly higher while fixed investment was revised lower. The data indicates that 2016 Q2 GDP is tracking in line with the consensus estimate of 2.7%. GDP was REVISED UP by 0.3 points to 0.8% in this second estimate of economic activity for 2016 Q1. This was slightly below the market expectations for an increase to 0.9%. Economic activity is now 2.0% ABOVE its year ago level and 10.1% ABOVE its 2007 Q4 cyclical peak. Because most of the adjustment was due to new March data, this revision suggests that the economy improved at the end of the quarter. Consumer Spending was revised higher by 0.04% to 1.9%, contributing 1.29% to economic growth. Business Fixed Investment was revised lower by 0.36% to -6.2%, contributing -0.81% to economic growth. Residential Investment was revised higher by 2.29% to 17.2%, contributing 0.56% to economic growth. Inventory Investment was revised modestly higher, contributing -0.20% to economic growth. Net Exports were revised higher with a modest increase in Exports and little change in Imports, contributing -0.21% to economic growth. Government Purchases were unchanged, contributing 0.20% to economic growth. As a result of all of these changes, Real Final Sales was revised modestly higher while Real Domestic Demand was unchanged. The GDP Price Index REVISED DOWN by 0.1 points to 0.7%, in line with market expectations of 0.7%. Economy-wide prices are now 1.3% ABOVE its year ago level.
Article by contingentmacro