The second look at first quarter 2017 US GDP

  • The first reading was +0.7% annualized
  • Personal consumption +0.6% vs +0.4% exp
  • Initial reading on consumption +0.3%
  • GDP ex-vehicles +1.7% vs +1.2% prior
  • GDP price index +2.2% vs +2.3% expected
  • GDP price index initially at +2.3%
  • Core PCE +1.7% vs +1.7% y/y initially
  • Deflator +2.2% vs +2.3% initially

Details:

  • Inventories cut 1.07 pp from GDP
  • Inventories +4.3B vs +10.3B initially
  • Exports +5.8% vs +5.8% initially
  • Imports +3.8% vs +4.1% initially
  • Home investment +13.8% vs +13.7% initially
  • Business investment in structures +28.4% vs +22.1% initially
  • Consumer spending +0.6% vs +0.3% initially
  • Spending on durables -1.4% vs -2.5% initially
  • Business investment +11.4% vs +9.4% initially

The business investment and consumer revisions are good news but in the durable goods report, the core orders are soft, so that raises fresh questions on business investment.