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--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
- 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
- When only the inventory component is excluded, real final sales
of domestic product were unrevised from the 2.5% gain reported in the
- 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 **