GDP for First Quarter in U.S. Revised Up
The economy in the U.S. during the first three months of 2016 experienced a slowdown that was not as pronounced as initially thought. Recent data has pointed to an increase for growth during the spring.
The Gross Domestic Product is a broad measure of the goods and services the economy in the U.S. produces. It grew by an adjusted annual rate of 0.8% during the first quarter of 2016, said the Commerce Department on Friday.
That increase was higher than the initial estimate of the agency in April, while said growth during the first quarter was just 0.5%. Economists were expecting growth to be revised to 1%.
Economic activity grew at a pace of 1.4% during the final three months of 2015. On the basis of one year, the GDP increased 2% during the first three months of 2016, identical to the final quarter rate of annual growth.
Revisions were modest. Compared to the report from last month, the new figures showed a bigger gain for residential investing and small drags on growth overall from foreign trade and private investment.
The report on Friday offered the first estimate that is official of the corporate profits for the year’s first three months. Profits following taxes, without valuation of inventory or capital consumption adjustments, increased at the rate of 1.9% from the previous quarter.
This rebound came following two straight quarters of dropping profits. Still, the profits were down over 3.6% compared to the same quarter one year ago.
Another separate measure that is closely aligned with the output of the economy, pretax profits with capital consumption and inventory valuation adjustments, increased at a rate that was more modest of 0.3% during the year’s first three months, and dropped 5.8% from the same period last year.
This output data was adjusted for any inflation but profit data did not account for changes in prices.
At a time of slow growth in the economy across the globe, it is hard for companies to find any growth, said one analytics company on Wall Street.
However, while dropping prices of energy and a dollar that is again strengthening earnings have been squeezed during recent quarters those headwinds appear ready to fade as the price of oil and the dollar begin to stabilize.
The economic growth in the U.S. had followed a pattern since the 2008 recession ended – a weak first three months followed by a rebound in the second quarter. This year might be the same as well.