Thursday, May 31, 2007

Q1 Real GDP Was Revised Downward by the US Department of Commerce

As anticipated real GDP was revised downward by the Bureau of Economic Analysis. The revision shows a significant drop from the first estimates released in late April. Using year over year (YOY) calculations the real GDP dropped from a 3.13% growth rate in Q4 2006 to 1.90% in Q1 2007. The segments causing the large drop were primarily changes in private inventories and residential construction. Although neither of these segments comprises a large proportion of GDP the declines relative to last year are quite large.

It should be noted that personal consumer expenditure (PCE) remained relatively strong with a YOY real growth rate of 3.50%.

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