U.S. GDP Decline Revised to 5.7%

123jump.com Staff
29 May, 2009
New York City

First quarter GDP estimate was revised to a decrease of 5.7% from an earlier estimate of 6.3% a month ago. The revision in GDP reflects higher than expected decrease in imports and smaller than expected decrease in inventories.

[R]9:00 AM New York – First quarter GDP estimate was revised to a decrease of 5.7% from an earlier estimate of 6.3% a month ago. The revision in GDP reflects higher than expected decrease in imports and smaller than expected decrease in inventories.[/R]

The GDP in the first quarter decreased at 5.7% according to the latest data from the Commerce Department. The GDP decline a month was estimated at 6.3%.

The smaller decrease in GDP in the quarter reflects a larger decline in imports and increase in durable goods orders and prices and a smaller decrease in prices of non-durable goods.

The decline in trade deficit and smaller decline in inventories also helped the revised data. Inventories in the quarter declined at annual rate of $91.4 billion compared to the previous estimate of $103.7 billion. The economy would have contracted at 3.4% without the inventories adjustment.

Real personal consumption expenditure increased at 1.5% in the first quarter compared to decrease of 4.3% in the fourth.

The price index for gross domestic purchases decreased 1% in the first quarter as estimated in the advance estimate. The decrease in the fourth quarter was 3.9%.

Excluding food and energy prices, the price index for gross domestic purchases increased 1.4% in the first quarter compared with increase of 1.2%.

Corporate profits from current production increased $42.6 billion in the first quarter compared to a decrease of $250.3 billion in the fourth quarter. Profits before taxes increased $152.1 billion in the first quarter compared to a decrease of $499.2 billion decrease.

Real federal government spending and investment in the first quarter decreased 4.3% compared to an increase of 7% in the fourth quarter. The national defense spending decreased 6.8% compared to an increase of 3.4% in the fourth quarter.