By Chris Cermak

WASHINGTON (MNI) – The Commerce Departments advance estimate of
first-quarter GDP may have put a dent in U.S. recovery hopes, but
economists are predicting an upward revision Thursday that could add
some momentum for coming quarters.

Dallas Federal Reserve President Richard Fisher last week said Q1
GDP would likely move up from the estimated annual rate of 1.8%, arguing
that “underlying fundamentals” were “a little bit stronger” than recent
data would suggest.

A Market News International survey forecast the preliminary
estimate would come in at 2.1%. All economists surveyed agreed an upward
revision was coming, with predictions ranging from 1.9% to 2.6%.

“It’s a series of small increases in each of the net
contributions,” Brian Jones, an economist with Societe Generale, said in
an interview. “It’s essentially across the board.”

Credit Suisse cited revised data from trade, construction and
inventories. While a widening of the trade deficit in March was
expected, a downward revision in February should add about 0.1
percentage points to the GDP figure, the note said.

Personal consumption is also forecast to be revised upward slightly
to show growth of 2.8% in the first quarter, up from 2.7% in the advance
estimate. The GDP price index, headline and core, are expected to hold
at 1.9% and 1.5% respectively.

Even a GDP revision on the higher end of the scale would still mark
sluggish growth that is unlikely to pull down unemployment over the long
term. Jones said he was eyeing April personal consumption expenditures
due out Friday for a clearer sign of a boost for the current quarter.

Personal spending is forecast to climb 0.5% and personal income to
rise 0.4% in April, according to the MNI survey.

Several Fed officials have described the weak first-quarter data as
a negative outlier that will be corrected in this years remaining
quarters. The Fed forecasts growth in the 3.1-3.3% range for the whole
of 2011.

The preliminary estimate of Q1 GDP will be released at 8:30 a.m. ET
Thursday and PCE at 8:30 a.m. ET on Friday by the Commerce Department.

— Chris Cermak is a reporter for Need to Know News

** Market News International Washington Bureau: 202-371-2121 **