Q1 GDP revised slightly downward to 2.4%

posted at 9:21 am on May 30, 2013 by Ed Morrissey

As revisions go, this is about as mild as we see.  The advance estimate of Q1 GDP came in at 2.5%, and the interim report dropped only slightly to 2.4%, more or less statistical noise:

Real gross domestic product –the output of goods and services produced by labor and property located in the United States –increased at an annual rate of 2.4 percent in the first quarter of 2013 (that is, from the fourth quarter to the first quarter), according to the “second” estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 0.4 percent.

The GDP estimate released today is based on more complete source data than were available for the “advance” estimate issued last month. In the advance estimate, real GDP increased 2.5 percent. With the second estimate for the first quarter, increases in private inventory investment, in exports, and in imports were less than previously estimated, but the general picture of overall economic activity is not greatly changed (for more information, see “Revisions” on page 4).

Essentially, this is the same report as last time, with one relatively positive change.  The key metric of real final sales of domestic product rose from 1.5% last month to 1.8% this month. That’s nowhere near the kind of growth we need to see and shows that Q1′s growth is still inventory-expansion dependent, but it’s at least three-tenths of a tick better than we thought initially.

Initial jobless claims also rose, but not so much as to move out of the range over the last several weeks.  That may change significantly next week, as the Monday holiday forced a few states to send estimates instead of solid numbers:

Initial claims for state unemployment benefits increased 10,000 to a seasonally adjusted 354,000, the Labor Department said on Thursday. Claims for the prior week were revised to show 4,000 more applications received than previously reported.

Economists polled by Reuters had expected first-time applications to hold steady at 340,000 last week.

A Labor Department analyst said claims for five states, including Virginia, Minnesota and Oregon, were estimated since state offices had less time to prepare data because of the national holiday on Monday.

Over the last few months, this indicator — which is only indirectly correlative, and only over long stretches and not single weeks — has bounced between 325K and 350K or so.  This isn’t out of line for the recent trend, and may not even be accurate given the estimations.

Essentially, this is just a big shrug.  We’re still stagnating, job creation is stalled, and these indicators don’t show any evidence that things are changing in either direction.


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