Domestic Purchases Robust In Q1 Despite Lower GDP Revision

Despite a downward revision in overall Q1 GDP, the 2nd reading suggested that domestic purchases in the US were stronger in Q1 than the advance report suggested.

• Final sales to domestic purchasers (which takes out the impact of inventories and trade) were revised up in this reading - both overall and private:
  • Overall +2.7%, rev from +2.6% (vs +1.7% in Q4)
  • Private +3.9%, rev from +3.7% (vs +2.6% in Q4)
• These series have been accelerating since bottoming out in Q321 at 1.3-1.4%.
• The contribution from consumption (both services and goods) was revised up, but the drag from inventories and net exports was also revised up.
• Note the FOMC minutes made mention of this yesterday: "Participants commented that after its rapid growth in the last quarter of 2021, real GDP had declined in the first quarter of this year, with net exports and inventory investment making large negative contributions to growth. They noted, however, that these volatile components tended to contain little signal about subsequent growth and that household spending and business fixed investment had remained strong in the first quarter. "

In chained 2012 dollars.Source: BEA, MNI