MNI DATA IMPACT: Q4 GDP Revised Down To 2.2%; Claims 211,000>

--Downward Revision To Q4 GDP Led By PCE, Fixed Invest, Government

--Initial Claims 4-Week Moving Average Down 3,250

By Kevin Kastner, Harrison Clarke and Shikha Dave

     WASHINGTON (MNI) - Fourth quarter GDP was revised down to a 2.2% 

pace from the 2.6% preliminary estimate, a larger revision than the 

downward adjustment to 2.3% expected by both the Bloomberg and MNI 

surveys, data released Thursday showed. 

     Released at the same time, the level of initial claims fell by 

5,000 to 211,000 in the March 23 week. The Bloomberg consensus had 

expected a 220,000 level, while the MNI survey looked for a 223,000 

level. 

     Here are some of the key factors from the data release on Thursday: 

     - The fourth quarter price index was revised down slightly to a 

1.7% rate. Both surveys had expected the pace to remain at 1.8%. 

     - The core PCE price index was revised up to a 1.8% pace from the 

1.7% pace in the first estimate for the quarter. The y/y rate was 

unrevised from the previously reported 1.9% and the 2.0% rate in Q3, so 

just below the FOMC's target. The monthly January data will be released 

on Friday. 

     - The revision to Q4 GDP was driven by downward adjustments to 

personal consumption expenditures, residential and nonresidential fixed 

investment, and government expenditures. These were offset by a narrower 

net export gap than previously reported.

     - Q1 GDP tracking points to a softer reading, with some forecasts 

around 1.5%. A combination of the January government shutdown, harsh 

weather, and residual seasonality are being cited by analysts. 

     - The four-week moving average for claims fell by 3,250 to 217,250 

in the March 23 week after an increase of 750 in the previous week. If 

the headline holds steady next week, the average would fall by 1,750 to 

215,500 as a 218,000 level in the March 2 week rolls out. 

     - Annual revisions were released with the claims data, altering 

some past history, but generally maintaining the pattern of weekly 

movements. 

     - Continuing claims rose by 13,000 to 1.756 million in the March 16 

employment survey week, down by 17,000 from the February 16 employment 

survey week. 

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

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