Q1 GDP-Adv.

Updated 25-Jun-09 09:28 ET

Highlights

The component revisions to GDP were minor, resulting in only a modest revision to first quarter real GDP to -5.5% from a previously reported -5.7%. Nothing significant jumps out from the data.
The upward revision to GDP was primarily the result of a smaller decline in inventories than previously reported. Government expenditures were also revised higher, showing just a 3.1% annual rate of decline compared to a previously reported -3.5%.
Other key components were actually revised lower. Personal consumption expenditures were revised to +1.4% from +1.5%. Exports were revised to show a 30.6% decline from a previously reported 28.7% drop.
Raw Data Available At: http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

There were a number of minor component revisions for the final Q1 GDP report, but nothing that changes the relevant trends or anything that will alter economic expectations.

The trends in the economy were moderately poor through the summer of 2008. Then, in September, the trends tanked along with the stock market. Some tech firms noted a significant dropoff in demand right after the mini-panic of mid-September. These worsening trends were readily apparent in the fourth quarter GDP numbers, and will remain so into 2009 as well. Consumer spending is weakening and will only take a significant turn for the better once the declines in payroll moderate. Business investment is also in a sharp retrenchment. The stronger dollar clearly hurt export demand. A lot now depends on overall psychology and perceptions of how well the government responds to the financial market and other problems such as exist in the auto industry. The economic outlook is now as much a function of government action as it is of the traditional correlations and trends among macro-economic variables.

Category	Q1	Q4	Q3	Q2	Q1
GDP	-5.5%	-6.3%	-0.5%	2.8%	0.9%
Inventories (change)	-$87.1B	-$25.8B	-$29.6B	-$50.6B	-$10.2B
Final Sales	-3.3%	-6.2%	-1.3%	4.4%	0.9%
PCE	1.4%	-4.3%	-3.8%	1.2%	0.9%
Nonresidential Inv.	-37.3%	-21.7%	-1.7%	2.5%	2.4%
Structures	-42.9%	-9.4%	9.7%	18.5%	8.6%
Equipment & Software	-33.7%	-28.1%	-7.5%	-5.0%	-0.6%
Residential Inv.	-38.8%	-22.8%	-16.0%	-13.3%	-25.1%
Net Exports	-$296.8B	-$364.5B	-$353.1B	-$381.3B	-$462.0B
Export	-30.6%	-23.6%	3.0%	12.3%	5.1%
Imports	-36.4%	-17.5%	-3.5%	-7.3%	-0.8%
Government	-3.1%	1.3%	5.8%	3.9%	1.9%
GDP Price Index	2.8%	0.5%	3.9%	1.1%	2.6%