First-quarter economic growth was a bit brisker than first estimated, the government said Thursday, while weekly jobless claims dipped last week. Both numbers were slightly weaker than expected but had little initial impact on stocks and bonds.
In its first revision of gross domestic product, the Commerce Department said the U.S. economy expanded at a 4.4% annual pace in the first quarter, up from the initial estimate of 4.2%. The growth reflected strong gains in the profitability of American companies and a greater-than-expected build-up of product inventories. Economists had been forecasting a growth rate of 4.5%, on average.
Two measures of inflation contained in the report looked benign. A divisor that is used to adjust overall GDP for inflation came in at 2.6% in the quarter, up one-tenth of a percentage point from the initial estimate, while the so-called personal consumption expenditures index rose at an annual 3% rate, down from 3.2% in the first estimate.
On a core basis that excludes food and energy, the personal consumption expenditure index rose 1.7%, down from 2% in the first estimate.
Thursday's report from the Commerce Department contained the government's first major estimate of annualized profit growth in first quarter, showing that corporate earnings jumped 36.7% from the prior year, the best performance in two decades.
The lion's share of the upward revision was related to inventory build, which came in at $28.2 billion annualized in Thursday's report, compared with $15.3 billion in the first estimate. Final sales, meanwhile, rose 3.7% annualized in the revision, down from 3.9% last month, while consumer spending rose 3.9% compared with an estimated 3.8% last month, and fixed investment rose at a 5.8% annualized rate in Thursday's report, compared with 7.2% estimated last month.
Meanwhile, the Labor Department said first-time claims for U.S. jobless benefits totaled 344,000 in the week ended Saturday, down from a revised 347,000 the prior week. Economists had expected 335,000 claims in the most recent week. The four-week moving average rose to 335,000 from 334,000.