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Q1 GDP Final: Slight Upward Revision

June 28, 2016

Bottom Line: Economic activity was slightly better in 2016 Q1 from previous reports. Because this revision was largely due to new March data, this suggests that the pace of growth increased slightly at the end of the quarter. Economic activity is still a modest 2.1% above its year ago level and 10.1% above its previous peak level in 2007 Q4. 2016 Q2 ends this week, the data released so far for April, May and early June suggest that 2016 Q2 economic activity grew at a faster pace than in Q1; many early estimates are between 2.5% to 3.0%.

GDP was REVISED HIGHER by 0.3 percentage points to 1.1% in this third estimate for 2016 Q1, compared with market expectations for an upward revision to 1.0%. Economic activity is now 2.1% above its year ago level. In final sales categories, net exports, exports, fixed investment and government purchases were revised higher while residential investment, consumption, and imports were revised lower. As a result of all of these changes, real final sales was revised up by 0.3 percentage points to 1.3% while real domestic demand was revised down by 0.1 percentage points to 1.2%.

The GDP Price Index was REVISED BELOW by 0.2 points to 0.5%, compared with market expectations of 0.6%. Economy-wide prices are now 1.2% ABOVE year ago levels. Economy-wide inflation hit a cyclical peak of 3.4%in 2006 Q2 and reached a cyclical nadir of 0.2% in 2009 Q3.

Article by contingentmacro