Global| Jun 26 20031Q GDP Revised Down, Profits Stronger
by:Tom Moeller
|in:Economy in Brief
Summary
Real GDP growth in 1Q03 was revised lower to 1.4% (AR) from the preliminary estimate of 1.9% growth. The downward revision was greater than Consensus expectations for 1.9% growth. Revisions to most components were minor including a [...]
Real GDP growth in 1Q03 was revised lower to 1.4% (AR) from the preliminary estimate of 1.9% growth. The downward revision was greater than Consensus expectations for 1.9% growth.
Revisions to most components were minor including a downward revision to inventory investment and an upward revision to imports. Spending on equipment and software was revised up.
Inflation as measured by the GDP chain price deflator was revised down slightly to 2.4% (AR). The chain price deflator for domestic final demand rose at a 3.5% rate versus a 1.3% gain last year. The acceleration primarily reflected higher energy prices and a strong 7.4% rate of gain in the residential investment price deflator.
Corporate profits w/adjustment for inventory valuation and depreciation grew at a revised 10.7% rate (2.4% y/y) versus the initial estimate of 4.0% growth. The tax liability on profits surged 30.7% and was revised up. Nevertheless, after tax operating profits grew at a 3.5% rate versus the initial estimate of a 3.3% decline.
Corporate profits of nonfinancial corporations w/IVA and CCA, a figure derived from the income side of NIPA, grew at a 10.6% rate (7.5% y/y) in 1Q03.
| Chained '96 $, % AR | 1Q'03 (Final) | 1Q'03 (Prelim.) | 4Q'02 | Y/Y | 2002 | 2001 | 2000 |
|---|---|---|---|---|---|---|---|
| GDP | 1.4% | 1.9% | 1.4% | 2.0% | 2.4% | 0.3% | 3.8% |
| Inventory Effect | -0.5% | -0.5% | 0.3% | 0.3% | 0.6% | -1.2% | 0.1% |
| Final Sales | 2.3% | 2.4% | 1.1% | 1.7% | 1.8% | 1.5% | 3.7% |
| Trade Effect | 0.8% | 0.9% | -1.6% | -0.4% | -0.5% | -0.1% | -0.6% |
| Domestic Final Demand | 1.4% | 1.4% | 2.6% | 2.1% | 2.4% | 1.6% | 4.3% |
| Chained GDP Price Deflator | 2.4% | 2.5% | 1.8% | 1.6% | 1.1% | 2.4% | 2.1% |
by Tom Moeller June 26, 2003
Initial claims for unemployment insurance fell 5.2% last week to 404,000. The w/w decline was much greater than Consensus expectations for claims of 418,000. Claims in the prior week were revised up.
Jobless claims are down 12.0% from the weekly peak in late April.
The four-week moving average of initial claims fell to 428,250 (+9.3% y/y).
Continuing claims for unemployment insurance rose 1.2% w/w. The prior week's level was revised down slightly.
During the last ten years there has been a 84% (inverse) correlation between the level of continuing claims for unemployment insurance and the y/y change in nonfarm payrolls.
The insured rate of unemployment rose to 3.0% from 2.9%.
| Unemployment Insurance (000s) | 6/21/03 | 6/14/03 | Y/Y | 2002 | 2001 | 2000 |
|---|---|---|---|---|---|---|
| Initial Claims | 404.0 | 426.0 | 4.1% | 404.3 | 406.0 | 299.7 |
| Continuing Claims | -- | 3,741 | 3.2% | 3,575 | 3,022 | 2,114 |
by Tom Moeller June 26, 2003
The Conference Board's National Index of Help-Wanted Advertising remained unchanged in May at the 42 year low.
During the last ten years there has been a 71% correlation between the level of help-wanted advertising and the monthly change in nonfarm payrolls. The correlation with the y/y change in employment has been 92%.
The proportion of labor markets with rising want-ad volume rose to a still low 37% after the collapse in April to 20%. The three month moving average of this indicator fell to 35%.
All of the figures mentioned above are seasonally adjusted.
The Conference Board surveys help-wanted advertising volume in 51 major newspapers across the country every month.
Visit the Conference Board for more information.
| Conference Board | May | April | May '02 |
|---|---|---|---|
| National Help Wanted Index | 36 | 36 | 44 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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