Q1's 2.2 GDP Stronger Than Q4's 3.0

by Bob McTeer

Source: Forbes

This morning’s initial first-quarter real GDP increase at a 2.2 percent annual rate was stronger than the fourth quarter’s 3.0 percent after adjustment for volatile inventory fluctuations. An inventory buildup accounted for two-thirds of the fourth-quarter increase. Real Final Sales—GDP minus inventories—grew only 1.1 percent in the first quarter versus 1.6 percent in the first quarter. I would argue that the first quarter was a bit stronger than the fourth. Of course, there will be two more estimates before the final numbers are established for the first quarter, and the fourth-quarter estimate will be included in the annual revisions in July.

The price index for gross domestic purchases increased at a rate of 2.4 percent, compared with only 1.1 percent in the fourth quarter—not overly large, but headed in the wrong direction.

Click here to read the rest of the article.

View in PDF