U.S. GDP Growth Estimate Remains at 3.1%

The pace of economic growth in the first quarter remained slightly lower than previously estimated, according to the final output reading from the Bureau of Economic Analysis.

Gross domestic product growth remained at an annual 3.1% in the first three months of the year, compared with the advance estimate in April of 3.2% but matching Econoday’s consensus. GDP rose 2.2% in the fourth quarter of last year.

“This morning’s data was notable in that it illustrated even weaker spending in Q1 than previously reported via real GDP revisions,” said Ian Lyngen, BMO Capital Markets’ head of rates strategy. “It’s ‘old’ information so not game changing, but puts a finer point on the degree of softness and is a reminder that the Fed continues betting on the rebound of the consumer in Q2.”

The personal consumption expenditures price index rose 0.5% from the fourth quarter, compared with the second estimate of a 0.4% gain. Excluding food and energy prices, the index rose 1.2% versus the prior quarter’s 1.8% gain.

Personal consumption expenditures grew 0.9% in the first quarter from 2.5% expansion in the fourth quarter and the second estimate print of 1.3%. It was below Econoday’s view of 1.3%.

“There were a few notable adjustments to the data, but, as usual, most of the changes in the third estimate came from pretty obscure sources: Consumer spending was revised down; business investment was revised significantly upward; while housing and public sector construction were both nudged higher,” said Stephen Stanley, chief economist at Amherst Pierpont Securities.

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