Q1 GDP Revised Higher

We had some good news this morning. First-quarter GDP growth was revised higher.

It’s still bad but not as bad as we thought. The original report said the economy grew in real terms by 0.7% during the first three months of the year. Now it looks like the economy grew by 1.2%.

That was the weakest performance since the first quarter of 2016 and followed a 2.1 percent rate of expansion in the fourth quarter. The government revised up its initial estimate of consumer spending growth, but said inventory investment was far smaller than previously reported.

The sluggish first-quarter growth pace is, however, probably not a true reflection of the economy’s health. GDP for the first three months of the year tends to underperform because of difficulties with the calculation of data that the government has acknowledged and is working to resolve.

The economic expansion is about to turn eight years old. It’s one of the longest and weakest expansions on record. Real GDP growth has tracked a 2.1% trend line fairly well for the last eight years.

Posted by on May 26th, 2017 at 11:47 am

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