The U.S. economy expanded at a slightly faster pace in the first quarter than initially estimated, reflecting less damage from trade and inventories, Commerce Department data showed Friday.
Key Points
Gross domestic product increased at a 0.8% annualized rate in three months through March (0.9% forecast), compared with 0.5% initially estimated The revised figure was paced by a larger reading on inventories and a narrower widening of the trade gap Wages and salaries were revised up for the fourth quarter and the gain in gross domestic income exceeded GDP in the first three months of 2016, which will stoke debate that first-quarter growth figures have been underestimated
Big Picture
The figures do little to alter views of the third consecutive sluggish start to the year, and could portend a tougher slog in the second quarter as businesses work to pare down those bigger stockpiles. At the same time, household income gains were stronger than previously reported as the labor market strengthened, which will help support consumer spending, which accounts for almost 70% of the economy.
Economist Takeaways
"One of the most interesting developments is this upward revision to wages and salaries for the fourth quarter," said Kevin Cummins, an economist at RBS Securities Inc. in Stamford, Connecticut."It's certainly not booming by any stretch, but we do expect above-trend growth for the next few quarters, led by the consumer and the health of the labor market."
