U.S Q1 Growth Revised Up

Selasa, 10 Mei 2016

US economic growth slowed in the first quarter but not as strongly as thought initially, amid a surge in spending the construction of the house and a steady increase in inventory investment by businesses.

The gross domestic product grew at an annual rate of 0.8 percent, versus 0.5 percent pace reported last month, the Commerce Department said in its second estimate of GDP Friday.

This was the lowest growth since the first quarter of 2015.

the upward revision of GDP growth in the first quarter also reflects a smaller trade drag than previously reported. The government also reported a rebound in corporate profits after taxes, which grew at a rate of 0.6 percent in the first quarter after plunging at a pace of 8.4 percent in the fourth quarter.

When measured from the income side, the economy grew at a rate of 2.2 percent after rising at a pace of 1.9 percent in the fourth quarter.

economy has been hurt by a strong dollar and weak global demand, which eroded export growth. It has also been squeezed by oil prices, which have corporate profits in against undercut oilfield as Schlumberger (SLB.N) and Halliburton (HAL.N), forcing them to reduce capital expenditure.

The economists also think the model used by the government to strip seasonal patterns of data are not fully accomplish its goal despite steps last year to solve the problem.

data from the first quarter GDP

residual seasonality plagued with underperforming last of growth in five six years since the economic recovery began in mid-09

There signs of the economy regained momentum early in the second quarter, with retail sales, goods exports, industrial production, housing starts and home sales surge in April.

The Federal Reserve of Atlanta is currently estimated second-quarter GDP growth at a rate of 2.9 percent. But the still high inventories pose a downside risk these forecasts.

GDP growth in the first quarter

Economists polled by Reuters had forecast would be revised up to a rate of 0.9 percent. The economy grew at a rate of 1.4 percent in the fourth quarter.

INVENTORY ACCUMULATION

Spending on residential construction grew at a rate of 17.1 percent in the first quarter, the fastest pace since the fourth quarter of 2012 . It was previously reported to have increased at a rate of 14.8 percent.

companies have accumulated stocks worth $ 69.6 billion, instead of $ 60.9 billion estimated last month. Stocks cut two tenths of a point of GDP growth in the first quarter instead of the 0.33 percentage point previously reported percentage.

There was no revision in consumer spending, which accounts for over two-thirds of US economic activity. Spending increased at a rate of 1.9 percent, a slowdown from the 2.4 percent rate in the fourth quarter.

Households were frugal in the first quarter, reducing long-term purchases of manufactured goods such as cars.

income available to households after accounting for taxes and inflation was revised up to show a surge to 4.0 percent rate in the first quarter, instead of the previously 2.9 percent. Savings were revised upward to $ 782.6 billion from $ 712.3 billion.

Exports are not as weak as initially planned. This, with a decline in imports, produced a smaller trade deficit, which subtracted 0.21 points from the first quarter of GDP instead of the point reported last month in 0.34 percentage percentage.

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