GDP revised to down 5.7% for Q1 2009

Below is the opening text to the U.S. government’s press release on the revised GDP numbers from the last quarter.  I have highlighted the most relevant parts in bold.  Overall, these revisions are not significant.  The main change I have seen is that inventories were not worked of as robustly in the original estimate – although this is not mentioned below.  I can’t expect this will have a huge impact on market sentiment. 

Real gross domestic product — the output of goods and services produced by labor and property located in the United States — decreased at an annual rate of 5.7 percent in the first quarter of 2009, (that is, from the fourth quarter to the first quarter), according to preliminary estimates released by the Bureau of Economic Analysis. In the fourth quarter, real GDP decreased 6.3 percent.

The GDP estimates released today are based on more complete source data than were available for the advance estimates issued last month. In the advance estimates, the decrease in real GDP was 6.1 percent (see "Revisions" on page 3).

The decrease in real GDP in the first quarter primarily reflected negative contributions from exports, equipment and software, private inventory investment, nonresidential structures, and residential fixed investment that were partly offset by a positive contribution from personal consumption expenditures (PCE). Imports, which are a subtraction in the calculation of GDP, decreased.

The smaller decrease in real GDP in the first quarter than in the fourth reflected a larger decrease in imports, an upturn in PCE for durable goods, and a smaller decrease in PCE for nondurable goods that were partly offset by larger decreases in private inventory investment and in nonresidential structures and a downturn in federal government spending.

Motor vehicle output subtracted 1.36 percentage points from the first-quarter change in real GDP after subtracting 2.01 percentage points from the fourth-quarter change. Final sales of computers added 0.06 percentage point to the first-quarter change in real GDP after subtracting 0.02 percentage point from the fourth-quarter change.


Gross Domestic Product, 1st quarter 2009 (preliminary) – BEA website

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