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Stronger In a Range

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Weaker In A Range

US TSYS SUMMARY

Ending The Week On A Soft Note

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Bearish Risk Growing

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Stronger, But Still Vulnerable

US

SP500 PE Ratio vs. CPI Inflation

--Downward Revision For Net Exports, Inventories, Fixed Investment
--PCE, Government Spending Revised Up From Advance Estimate
--Price Measures Generally Revised Lower, Including Core PCE Prices
By Kevin Kastner and Harrison Clarke
     WASHINGTON (MNI) - First quarter GDP was revised down slightly to a 
3.1% pace of growth from the 3.2% advance estimate, just above the 3.0% 
reading expected by a Bloomberg survey and in line with the 3.1% gain 
expected in an MNI survey. 
     Also released at the same time, initial claims rose by 3,000 to 
215,000 in the May 25 week, as expected by Bloomberg and above the 
212,000 level expected by MNI. 
     Here are some of the key factors from the data release on Thursday: 
     - The GDP price index was revised down slightly to a 0.8% gain, 
while the core PCE price index was revised down to a 1.0% gain from 1.3% 
in the advance estimate, both well below their rates in the fourth 
quarter. The year/year rate for the core PCE measure was revised down 
slightly to 1.6% from 1.7% in the advance estimate, now further below 
the 1.9% rate in the fourth quarter. 
     - The key factors in the downward adjustment were a wider net 
export gap and downward revision to nonresidential fixed investment, as 
well as smaller downward adjustments to private inventory growth and 
residential fixed investment. 
     - There was some offsetting upward revisions to both PCE and 
government spending. The price components were generally revised 
downwards. 
     - Final sales to domestic purchasers were revised up to a 1.5% pace 
from the 1.4% in the advance estimate, down from 2.1% in the fourth 
quarter, still suggesting that underlying growth is showing some 
deceleration. 
     - When only the inventory component is excluded, real final sales 
of domestic product were unrevised from the 2.5% gain reported in the 
advance estimate. 
     - The initial claims data reflect a 4,129 increase in unadjusted 
claims, when seasonal factors had expected a 1,481 increase in the 
current week. Five states reported estimated claims due to the shorter 
reporting period this week (Monday was a holiday). The largest 
unadjusted gain was in Michigan (+2,267), while large declines were seen 
in North Dakota (-3,264) and Pennsylvania (-2,073).
     - The four-week moving average for claims fell by 3,750 to 216,750 
in the May 25 week and would be expected to fall next week as a 228,000 
level in the May 4 week rolls out. 
     - Continuing claims fell by 26,000 to 1.657 million in the May 18 
employment survey week, lowering the four-week average by 3,500 to 1.673 
million. Continuing claims were at a level of 1.654 million in the April 
13 employment survey week. 
     ** MNI Washington Bureau: 202-371-2121 ** 
 
[TOPICS: MAUDS$,M$U$$$,MAUDR$]