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| First-Quarter 2006 GDP - "Advance" Estimate (#1) - Apr. 28, 2006 |
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Summary
Earlier this morning, the Commerce Department released its first ("advance") estimate of first-quarter 2006 gross domestic product. The report indicated real growth at an annual rate of 4.8% during the period, versus the 1.7% rate reported for last year's fourth quarter.
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Considering the amount of hype that preceded this morning's release of first-quarter GDP data, the numbers were not up to their billing. At least in my opinion they were not.
* The Commerce Department's "advance" estimate of first-quarter 2006 gross domestic product indicated real growth during the period at a 4.8% annual rate. This represented a sizable increase from last year's fourth quarter rate of 1.7%, and it compared with a 4.1% rate during last year's September quarter.
* Measured in nominal (pre-inflation) terms, first-quarter 2006 GDP rose at a 8.2% rate, up sharply from the 5.2% rate of nominal growth during last year's fourth quarter. Year over year, first-quarter nominal growth came in at 6.7%.
* Measured on a 1Q2006-over-1Q2005 basis, real GDP grew by 3.5%.
* The consensus estimate for real first-quarter growth anticipated something around a 5.0% annual rate, not materially different than the 4.8% rate actually reported.
* The increase in the nation's trade deficit during the first quarter subtracted a substantial $23.0 billion from real GDP for the period.
* A $16.0 billion decline in the rate of inventory accumulation during the first quarter added a similar amount to real final sales: 1Q2006 = $21.9 billion; 4Q2005 = $37.9 billion.
* Today's report continued to show the "stagflationary" mix to the overall numbers that has been in evidence over the last several quarters.
I will soon publish a more detailed examination of today's release.
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