US first quarter GDP was revised up 0.3 percentage points this morning to a seasonally adjusted annualized rate of 0.8 percent. The Bloomberg Econoday consensus was a bit more at 0.9% in a range of 0.5% to 1.1%.
Highlights
First-quarter GDP is now revised higher but only slightly, to an annualized growth rate of plus 0.8 percent for a 3 tenths gain from the initial estimate. Upward revisions to residential investment and exports are behind the small gain along with an unwanted upward revision to inventories. Nonresidential investment remains very weak with government purchases holding only modestly positive. Personal consumption was soft, unrevised at a plus 1.9 percent rate. Final demand is revised higher but not by very much, only 1 tenth to a very soft plus 1.2 percent. Inflation data are weak with the GDP price index revised 1 tenth lower to an annualized plus 0.6 percent. Residential investment, boosted by home improvements, is the standout in this report which otherwise shows a very soft opening to 2016.
Recent History
The second estimate for first-quarter GDP is expected to come in at plus 0.9 percent for a 4 tenths gain from the initial reading. Personal consumption expenditures are expected to be revised higher in what would underscore early second-quarter strength for retail sales. Residential fixed investment, in another indication of consumer strength, is also expected to be revised higher. The GDP price index is seen holding at only 0.7 percent.
Real GDP Growth
GDP Price Index Deflator
Second quarter year-over-year will be a tougher beat, especially if the GDP deflator (inflation) ticks up.
Mike “Mish” Shedlock
Mish:
It seemed to me that the increase was due to a restatement of cap-ex going back several years. The restatement of cap-ex lowered GDP in prior years thus making the change of the current year GDP look larger than it was other wise.
The continual restatement of numbers makes current releases of data irrelevant. Instead of going back and restating prior years, policies followed by companies on estimates should be used on data. Changes in estimates should be ran through current numbers. That would eliminate the sham of releasing numbers that are artificially made to look better than they are to only restate them months and years later when the changes are irrelevant.
Almost any number released by the federal govt or the federal reserve are not worth the paper they are printed on.
Fed Bank X says THIS. Fed Bank Y says THAT. Somebody else measures X, and later says No, I meant Y. Later, someone says all ongoing measurements are bogus due to corruption and should be Up/Down n%.
Fed Bank X vs Fed Bank Y means neither has any idea about what they are doing OR one does and the other is trying very hard to discredit the other, proclaiming them all as political animals rather than public servants … bringing the whole system into disrepute as liars and incompetents.
Given the fluid value of currencies, the other calculations don’t matter much either except like in a game of horseshoes … close gets a point.
PS Rachel at cardholder services just hit a bulls eye. She should get a job with the Fed prognosticators. My home phone (ooma) just got a call from me from my cell, according to caller id, while I was just sitting here typing this in. Bravo Rachel. My curiosity about how I could be calling myself made me answer.
whoops, my error. Rachel did not call from my cell. She called me from inside the house. Somebody call the police.
Yeah, I got a call like that myself once. I answered because I thought was from my father (we have the same name). I assume you also still have a listed old style house phone. It’s amusing how the caller ID system can be spoofed like that.
First-Quarter Gross National Product (GNP) Declined by 0.21% (-0.21%) according to shadowstats.