Global| May 25 20061Q US GDP Growth Revised Up, Profits Soared
by:Tom Moeller
|in:Economy in Brief
Summary
During 1Q06 the U.S. economy grew 5.3% (AR), faster than the initially estimated 4.8% which was an acceleration from 1.7% during 4Q05. The increase fell short of Consensus expectations for a revision to 5.8% and growth of 3.0-3.5% is [...]
Inventories subtracted a lesser 0.1% from GDP growth during 1Q versus the initial estimate of a 0.5% subtraction.
The 0.6 percentage point subtraction from a wider foreign trade deficit also was less than the initially estimated 0.8 percentage points. Growth in exports was revised up to 14.7% (8.1% y/y) and import growth of 12.8% (6.6% y/y) was little changed.
Domestic demand growth was lessened to 5.7% from 5.9% estimated initially due to lowered estimates of growth in personal consumption and business investment.
Growth in personal consumption expenditures was revised down to 5.2% (3.4% y/y) from 5.5%. The estimate of growth in spending on services was reduced to 2.2% (2.6% y/y) from 2.8% while estimates of strong spending in most goods categories were little changed.
Growth in business fixed investment also was reduced to a still strong 13.8% (10.0% y/y) from 17.9% estimated last month. Growth in spending on structures was halved to 11.4% (4.8% y/y). Residential investment grew 3.0% (5.9% y/y).
The estimate of the GDP chain price index was unchanged at 3.3%.
| Chained 2000$, % AR | 1Q '06 (Prelim.) | 1Q '06 (Advance) | 4Q '05 | Y/Y | 2005 | 2004 | 2003 |
|---|---|---|---|---|---|---|---|
| GDP | 5.3% | 4.8% | 1.7% | 3.6% | 3.5% | 4.2% | 2.7% |
| Inventory Effect | -0.1% | -0.5% | 1.9% | -0.2% | -0.3% | 0.3% | 0.0% |
| Final Sales | 5.5% | 5.4% | -0.2% | 3.8% | 3.8% | 3.9% | 2.7% |
| Foreign Trade Effect | -0.6% | -0.8% | -1.4% | 0.0% | -0.1% | -0.5% | -0.3% |
| Domestic Final Demand | 5.7% | 5.9% | 1.1% | 3.8% | 3.9% | 4.4% | 3.0% |
| Chained GDP Price Index | 3.3% | 3.3% | 3.5% | 3.2% | 2.8% | 2.6% | 2.0% |
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.
