**MNI DATA IMPACT: US Q1 GDP Unrev At +3.1%; Claims +10k>

--Upward Revision To Nonresidential Fixed Investment Offset By PCE

--Price Measures Generally Revised Higher; Core PCE Prices +1.7% Y/Y

By Kevin Kastner and Ian Stannard

     WASHINGTON (MNI) - First quarter GDP was unrevised at a 3.1% pace 

of growth, slightly below expectations for a modest upward revision to 

3.2%. The price measures were generally revised higher. Analysts widely 

expect that after the first quarter acceleration from the 2.2% fourth 

quarter pace, second quarter GDP will slow. 

     Also released at the same time, initial claims rose by 10,000 to 

227,000 in the June 22 week, above the 220,000 level expected by 

Bloomberg and the 219,000 level expected by MNI. 

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

     - The GDP price index was revised up to a 0.9% gain, while the core 

PCE price index was revised up to a 1.2% gain from 1.0% in the advance 

estimate, both still well below their rates in the fourth quarter. The 

year/year rate for the core PCE measure was revised up to 1.7% from 1.6% 

in the advance estimate. The rate was 1.9% in the fourth quarter. 

     - The key upward adjustment was to nonresidential fixed investment, 

particularly structures and intellectual property. There were also 

upward revisions to residential fixed investment and government 

spending, which posted the largest gain since the first quarter of 2016. 

     - PCE growth was revised down to provide some offset. The annual 

retail sales revisions released on Tuesday, including a large one to 

January sales, had suggested an upward adjustment to first quarter PCE 

was possible, but a large downward adjustment to services spending 

offset an upward revision to goods spending.

     - Inventories growth was revised modestly lower, while the net 

export gap was little changed.

     - Final sales to domestic purchasers were revised up very slightly 

to a 1.6% pace from 1.5% in the second estimate, but was still down from 

2.1% in the fourth quarter, suggesting that underlying growth has 

softened. 

     - When only the inventory component is excluded, real final sales 

of domestic product were revised up to a 2.6% gain from the 2.5% second 

estimate, owing mostly to the upward adjustment to nonresidential fixed 

investment. 

     - The initial claims data reflected an 18,173 increase in 

unadjusted claims, when seasonal factors had expected a smaller 8,471 

increase in the current week. 

     - The four-week moving average for claims rose by 2,250 to 221,250 

in the June 22 week and would be expected to rise further next week as a 

219,000 level in the June 1 week rolls out. 

     - Continuing claims rose by 22,000 to 1.688 million in the June 15 

employment survey week. Continuing claims were at a level of 1.662 

million in the May 18 employment survey week, so the monthly comparison 

is less favorable for June payrolls, due to be released on July 5. 

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

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