**MNI 5 Things: US 1Q GDP Revised Modestly Lower>

--5 Things We Learned From The Second Estimate of 1Q GDP

By Kevin Kastner and Holly Stokes

     WASHINGTON (MNI) - The following are the key points from the 

second estimate of first quarter GDP data released Wednesday by the 

Bureau of Economic Analysis: 

     - First quarter GDP was revised slightly lower to +2.2% SAAR vs 

unrevised +2.3% expected, with the price measures trimmed a bit as well, 

so there should be little reaction from analysts and the markets. The 

alternative measure of Gross Domestic Income was +2.8%, putting the 

average of the two measures at +2.5%.

     - The small downward adjustment to headline GDP reflected downward 

revisions to every component except a large upward adjustment to 

nonresidential fixed investment, the revision to the headline figure 

could have been larger without that upward adjustment. A downward 

revision to inventories growth was the key negative factor.

     - The PCE measure was revised down slightly to +1.0%, reflecting an 

upward adjustment to goods spending and a downward adjustment to 

services spending. The savings rate was unrevised at 3.1% from the 

advance estimate, still up from 2.6% in 4Q. 

     - The prices measures were generally revised lower, with the GDP 

price index now +1.9% vs advance +2.0%, while the closely watched core 

PCE was revised down to +2.3% from +2.5%, lowering the y/y rate to +1.6% 

vs +1.7% in the advance estimate, still slightly ahead of +1.5% in 4Q. 

     - Real final sales of domestic product were revised up to +2.0% vs 

+1.9% in advance estimate, reflecting an improved picture when the 

downward adjustment to inventories is excluded. Final sales to domestic 

purchasers were revised up solidly to +1.9% vs +1.6% in the advance 

estimate. 

     ** MNI Washington Bureau: 202-371-2121 ** 

[TOPICS: MAUDS$,M$U$$$,MAUDR$]