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1Q21 GDP: Key Components Even Stronger

June 24, 2021
Bottom Line:  The third reading of 1st Quarter GDP showed even stronger growth in consumption and investment, especially residential investment.  Overall, though, growth was unchanged at 6.4% annualized quarter-over-quarter, as the drag from net exports was even more significant than previously estimated.  Overall, the consumer drove growth in the 1st Quarter, with spending ending the quarter on a strong note.  That said, this report was old news with the 2nd Quarter ending in less than a week.  Early forecasts suggest the current quarter grew even stronger than the 1st Quarter, with consensus at 10% annualized quarter-over-quarter.  We forecast about 9% growth.
GDP was UNCHANGED at 6.4% in this third estimate for 2021 1st Quarter.  This compared with market expectations for an upward revision to 640.0%. Economic activity was 0.4% above its year-ago level.
In final sales categories, imports, fixed investment, exports, residential investment, consumption were revised higher while, net exports and government purchases were revised lower.
As a result of all of these changes, real final sales were revised down by 0.2 percentage points to 9.2% while real domestic demand was revised up by 0.2 percentage points to 10.5%.

The GDP Price Index
was REVISED UP by 0.07 points to 4.4%, compared with market expectations of 430.0%. Economy-wide prices were 2.1% ABOVE year-ago levels.