Revised Gross Domestic Product for the First Quarter 2018

After more complete data were collected, it now appears output growth was slightly slower than initially estimated in the first quarter of 2018.  According to the Bureau of Economic Analysis, Gross Domestic Product grew 2.2 percent on a seasonally adjusted annualized basis, down one-tenth of a percentage point from their first estimate.  On the surface, the difference is marginal, but there were a number of changes in the data beneath the headline leading to the subtle modification.

All four primary categories of output were lowered in the revision.  Personal consumption expenditures were one-tenth of a percentage point less than first estimated; both durable and nondurable goods were upwardly revised but were offset by a downward revision to services which is the largest subset of consumption.  Private investment was also revised lower by one-tenth of a percentage point, led by a 2.0 percent decline in residential investments (originally unchanged).  Net-exports worsened because American firms sold less to foreign buyers than first thought, and imports were greater than initially tallied.  Finally, government spending was marginally less than the early estimate indicated.

This indicator will get at least one other revision later this month as even more information is gathered regarding the first three months of this year.  If history is any indication, additional changes are unlikely to be substantial.  It appears the economy grew at a modest pace to start the year, not a barn burner but no cause for concern either.  Most indicators we follow remain constructive, suggesting further growth should be on the horizon for the American economy.