U.S. economic growth in the first quarter accelerated by slightly less than initially estimated, according to revised data released by the Commerce Department on Thursday.
The Commerce Department said real gross domestic product surged up by 3.1 percent in the first quarter, reflecting a slight downward from revision from the previously reported 3.2 percent jump.
The downwardly revised increase in GDP, which matched economist estimates, still represented a notable acceleration from the 2.2 percent growth seen in the fourth quarter of 2018.
The slightly slower than previously estimated GDP growth reflected downward revisions to non-residential fixed investment and private inventory investment and an upward revision to imports, which are a subtraction in the calculation of GDP.
Meanwhile, the report showed upward revisions to exports and consumer spending, although the pace of consumer spending growth still slowed to 1.3 percent in the first quarter from 2.5 percent in the fourth quarter.
The acceleration in GDP growth in the first quarter reflected an upturn in state and local government spending, accelerations in private inventory investment and exports, and a smaller decrease in residential investment.
However, Paul Ashworth, Chief U.S. Economist at Capital Economics, previously described the spike in state and local government spending as “very suspicious,” noting the rebound was almost entirely due to a jump in government investment in highways and roads.
The revised data also showed core consumer prices, which exclude food and energy prices, climbed by 1.6 percent in the first quarter compared to the previously reported 1.7 percent increase.
“Consumer inflation is downright weak,” said Chris Low, chief economist at FTN Financial. “The Fed will dismiss it as transient, as they do whenever inflation is weak, but it does not feel transient given the failure of consumption to recover so far in the second quarter.”
For comments and feedback contact: editorial@rttnews.com
Forex News
