1st Quarter GDP Revised Upward To 1.1%

Strength in net exports and less weakness in nonresidential fixed investment gave a boost to first-quarter GDP which rose 1.1 percent in the 3rd estimate vs plus 0.8 percent for the second estimate. Net exports added more than 1 tenth to GDP as exports rose slightly in the quarter and imports fell. An upward revision to software helped shave the negative contribution from nonresidential investment by 2 tenths to 6 tenths. On the downward side, the positive contribution from personal consumption expenditures was lowered by nearly 3 tenths to 1 percentage point as service spending was cut. Inventories were little changed in the revision, subtracting 2 tenths from GDP which is welcome news as inventories are poised to be restocked. Residential investment was a main positive in the quarter, adding 5 tenths to GDP. Early estimates for second-quarter GDP are running at about 2 percent, a more respectable rate but still far from robust especially with the third-quarter outlook clouded by Brexit.

Recent History Of This Indicator:
The third estimate for first-quarter GDP is expected to come in at plus 1.0 percent for a 2 tenths gain from the second estimate. Residential investment was the standout in the first quarter, contrasting with sharp weakness in nonresidential investment. Personal consumption expenditures were soft in the quarter as were final sales which were up only 1.0 percent in the second estimate. The GDP price index is seen holding at 0.6 percent.