1Q23 GDP: Positive Revisions, Still Tepid Growth

Bottom Line:  The second reading of 1st Quarter 2023 GDP saw modest positive revisions on the back of stronger consumption readings late in the quarter. Consumer spending on services was modestly stronger late in the quarter. Moreover, the drag from inventories was revised moderately lower. Residential fixed investment was still a drag, mostly as expected. Trade and government spending remained positive contributors. Overall, Real final domestic demand was more robust, up 2.95% annualized in the quarter, a tenth higher than previously reported and its highest reading since the 1st Quarter of 2021. Still, the trend remains tepid. Tomorrow's personal income and spending report will give us a more timely read on how consumer spending started in the current quarter.