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GDP:  Small Revisions, Core PCE Edged Higher

June 27, 2019

Bottom Line: Overall economic activity in 2019 Q1-19 was in-line with previous reports, but there were negative revisions to consumption, mostly offset by upward revisions to business fixed investment and residential investment. Core PCE, the Fed's preferred inflation metric, was revised higher to 1.2%, from 1.0%. Economic activity is now a modest 3.2% above its year ago level and 26.1% above its previous peak level in 2007 Q4. 2019 Q2 ends this weekend, the data released so far for April, May and early June suggest that 2019 Q2 economic activity grew at a slower pace than in Q1-19; many early estimates are between 1.8 to 2.0%.

GDP was UNCHANGED at 3.1% in this third estimate for 2019 1st Quarter.
This compared with market expectations for an upward revision to 3.2%. Economic activity is now 3.2% above its year ago level.

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

As a result of all of these changes, real final sales was revised up by 0.1 percentage points to 2.6% while real domestic demand was revised up by 0.1 percentage points to 1.6%.

The GDP Price Index was REVISED UP by 0.14 points to 0.9%, compared with market expectations of 0.8%. Economy-wide prices are now 1.9% ABOVE year ago levels.

Article by Contingent Macro Advisors