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GDP:  Q1 Consumption Slower Than Previously Reported

June 28, 2018

Bottom Line: Economic activity was slightly lower than previously estimated in the 1st Quarter of 2018. Consumer spending was revised lower, while business fixed investment was higher but residential investment was lower. Of course, this is old news given that the 2nd Quarter ends on Saturday. Early estimates are for sharp acceleration in growth-- Bloomberg consensus estimate of 61 economists is 3.4%, Atlanta Fed's GDPNow model is at 4.48% and the New York Fed's Nowcast is at 2.87%.

GDP was REVISED LOWER by 0.2 percentage points to 2.0% in this third estimate for 2018 1st Quarter.
This compared with market expectations for no change revision to 2.2%. Economic activity is now 2.8% above its year ago level.

In final sales categories, fixed investment, residential investment, imports, government purchases, and net exports were revised higher while exports and consumption were revised lower.

As a result of all of these changes, real final sales was revised down by 0.04 percentage points to 2.0% while real domestic demand was revised up by 0.1 percentage points to 2.0%.

The GDP Price Index was REVISED UP by 0.25 points to 2.2%, compared with market expectations of 1.9%. Economy-wide prices are now 1.9% ABOVE year ago levels.

Article by Contingent Macro Advisors