Third Estimate of First Quarter GDP +1.1%, Consumer Spending Weaker Again

by Mike ‘Mish’ Shedlock
Mish Talk

The third estimate of first quarter GDP came in at +1.1%, revised up from the second estimate of +0.8%.

A small bounce was expected. The Bloomberg Econoday consensus estimate was 1.0% in a range of 0.9% to 1.2%.


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.

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