U.S. Economy Grows Much More Than Initially Estimated In Q1
May 26 2017 - 5:22AM
RTTF2
A report released by the Commerce Department on Friday showed
that the U.S. economy grew by much more than initially estimated in
the first three months of the year.
The Commerce Department said gross domestic product climbed by
1.2 percent in the first quarter compared to the previously
reported 0.7 percent increase.
Economists had been expecting a more modest upward revision to
the pace of GDP growth to approximately 0.9 percent.
Despite the bigger than expected upward revision, the GDP growth
in the first quarter still reflects a notable slowdown compared to
the 2.1 percent increase in the fourth quarter.
ING Senior Economist James Knightley noted the upwardly revised
first quarter GDP growth is still poor relative to the majority of
other developed markets.
"There were slight improvements in all of the key components,
but it is still a very disappointing outcome, mainly caused by a
clear slowdown in consumer spending and a run down in inventories,"
Knightley said.
He added, "The Federal Reserve remains of the view that this
softer growth period is 'transitory,' but the high frequency
numbers for the second quarter are not exactly pointing to a huge
rebound."
The pace of consumer spending growth in the first quarter was
upwardly revised to 0.6 percent from 0.3 percent, although it
compares to the 3.5 percent jump in the fourth quarter.
The Commerce Department said upward revisions to non-residential
fixed investment and state and local government spending were
partly offset by a downward revision to private inventory
investment.
Meanwhile, a reading on core consumer prices, which exclude food
and energy prices, showed that the pace of price growth accelerated
to 2.1 percent in the first quarter from 1.3 percent in the fourth
quarter.
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