**MNI DATA IMPACT: US Q1 GDP Rev Down To +3.1%; Claims +3k>

--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$]