|
GDP grows 4.3% in 1Q
|
 |
June 25, 1999: 10:23 a.m. ET
Final reading on growth, prices slightly above analysts' forecast
|
NEW YORK (CNNfn) - The U.S. economy expanded slightly quicker than anticipated in the first quarter as corporate profits and consumer spending grew sharply, the Commerce Department said Friday.
The final revision of the gross domestic product -- the broadest measure of the nation's economy -- came in at a 4.3 percent annual rate for the first three months of the year.
That's slightly higher than the 4.2 percent figure predicted by economists surveyed by Reuters and the 4.1 percent revised rate released by the government last month.
The closely watched GDP price deflator grew at a revised 1.6 percent. Analysts had expected the rate to remain steady at 1.4 percent.
The government said the revised GDP growth was triggered by a narrowing in the trade deficit and a brightening economic picture in Asia, which has led to a pickup in U.S. manufacturing activity.
The GDP revision is a bit higher than expected, but the numbers should have little effect on markets, said Frazier Evans, senior economist at Colonial Management Associates.
"This is ancient history and what we're really thinking about is what the economy is doing today and what the Fed is going to do next week," he told CNNfn.
One major revision in the report came under the category of first-quarter company profits after taxes, which was reported to have climbed at an annual rate of 6.2 percent - to a seasonally adjusted $501.9 billion - as opposed to the originally reported rate of 4.3 percent. The revised figure is even more of a contrast to the 1 percent downturn in the 1998 fourth quarter when profits shrank as tobacco companies paid out money to settle lawsuits.
The earnings growth was the highest since a 7.9 percent increase in the first three months of 1995, the Commerce Department said.
Consumer spending on goods and services rose at its fastest rate in 11 years, the department said. Consumer spending was up 6.7 percent for the first three months of the year, compared with an earlier reading of 6.8 percent and a 5 percent increase in the fourth quarter of 1998.
The bond market, which has been closely watching economic data as it awaits the Federal Reserve meeting next week on the future of short-term interest rates, was little changed on the news.
The benchmark 30-year Treasury was up 11/32 in price, for a yield of 6.13 percent. Prior to the 8:30 ET report, the bond was trading up 8/32 for a yield of 6.138 percent.
-- from staff and wire reports
|
|
|
|
|
|
Commerce Department
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
