May 25, 2006

1st Quarter GDP Revised to 5.3%; One More Revision to Go

Filed under: Economy,MSM Biz/Other Bias,Taxes & Government — Tom @ 10:16 am

More ho-hum news from the “Greatest Story Never Told” — Real GDP was just revised upward by a half-point:

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 5.3 percent in the first quarter of 2006, according to preliminary estimates released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 1.7 percent.

The GDP estimates released today are based on more complete source data than were available for the advance estimates issued last month. In the advance estimates, the increase in real GDP was 4.8 percent.

I think the first quarter of 2006 borrowed a little from the fourth of 2005.

IF the 5.3% holds (in fact, unless it doesn’t drop by over a point in the final revision in late June), it’s the highest quarterly rate since 7.2% the third quarter of 2003.

IF the 5.3% holds with no change in the final revision, growth during the past four quarters will have been 3.6%; pretty good, but not spectacular.

Ah, but AP says this wasn’t as good as “expected”:

Economists, however, were predicting an even bigger upgrade to the first-quarter reading. Before the release of the report they were forecasting economic growth to clock in at a 5.8 percent pace. Even though the revised figure fell short of that, it nonetheless made clear that the economy had snapped out of its end-of-year lull.

I have a bit of trouble with those “economists” who expected a full point change from the April to May estimates. I don’t recall that happening in many years. Who knows, maybe the other half-point will come in with the final report.
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UPDATE: The headline on the AP article at MyWay that I linked above is “Economy Dashes Ahead at 5.3 Percent Pace,” which is very decent. Mary Katharine Ham over at Hugh Hewitt’s place didn’t find the same thing at Dow Jones.

UPDATE 2: Kudlow’s take is here (HT Instapundit). His post is entitled “Great American Boom Continued,” who then calls it a steady economy in the body. Give me another quarter of over 5%, and I’ll be with you on using the B-word, Larry.

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