WASHINGTON - First quarter GDP growth was revised up to a 1.4% pace in the third estimate from the 1.2% gain in the second estimate, with a strong upward revision to PCE the key factor, data released Thursday by the Bureau of Economic Analysis showed.
Still, the first quarter data are relatively weak and analysts expected a stronger showing for GDP growth in the second quarter. The usual release of annual revisions to the data will occur with the advance second quarter GDP estimate, which could alter the pattern of growth in recent years.
PCE growth was revised up sharply to a 1.1% annual rate from the 0.6% rise in the second estimate. Durable goods PCE is now down 1.6%, a slight downward adjustment from the 1.4% decline in the second estimate. However, nondurable goods PCE was revised up to a 1.6% pace from the 1.2% rise in the second estimate and services PCE now stands up 1.4%, upwardly revised from the 0.8% gain in the second estimate, as many analysts expected after the quarterly services report was released.
The net export gap is now reported at $595.6 billion for the first quarter, smaller than the $599.9 billion gap previously reported and larger contribution to first quarter GDP than in the second estimate.
Government spending was down 0.9% after revision, a smaller pace of decline than the 1.1% drop in the second estimate.
Nonresidential fixed investment rose by 10.4% in the first quarter, downwardly revised from the 11.4% surge in the second estimate, but still very strong. Investment in structures is now up 22.2% vs the 28.4% jump in second estimate, but still very strong. Investment in equipment is up 7.8%, revised up from the 7.2% gain in the first estimate of the quarter.
Residential fixed investment is now up 13.0%, a downward revision from the 13.8% increase in the second estimate.
Inventories are now up $2.6 billion in the first quarter after being reported up $4.3 billion in the second estimate.
When the inventory component is removed, real final sales were up 2.6% in the first quarter, an upward adjustment from the 2.2% gain previously reported.
The chain price index was revised down to a 1.9% pace of growth for the first quarter from a 2.2% rate in the second estimate. The closely watched core PCE price index was revised down slightly to a 2.0% in the most recent estimate after being reported up 2.1% in the second estimate. However, the year/year rate for this measure was unrevised at 1.7%, the same as in the third and fourth quarters.
