First Quarter GDP Estimate Falls Short

(GDP report updated with corporate profits and inflation numbers)

NEW YORK ( TheStreet) --The government's stuck to its advance estimate for first-quarter GDP, disappointing economists who had expected a slight upward revision.

The economy expanded at an annual rate of 1.8% during the first quarter. Upward revisions to exports, to private inventory investment, and to nonresidential fixed investment were offset by an upward revision to imports and a downward revision to personal consumption expenditures.

In the fourth quarter, the economy expanded at an annual rate of 3.1%. The slowdown in the first quarter has been attributed among other things to rough weather, but there are growing concerns that the economy might be slowing down as consumers deal with rising oil prices.

Personal income and spending data will be released on Friday. Personal income is expected to rise 0.4%, while personal spending is forecast to rise 0.5%.

The government also released for the first time its report on corporate profits during the first quarter. Profits during the first quarter rose to a seasonally adjusted annual rate of $1.7 trillion, up 8.5% over the year-ago period, and 1.3% over the prior quarter.

The Personal Consumption Expenditure Index, an indicator of inflation, rose 3.8% in the first quarter. The core Personal Consumption Expenditure Index, the Fed's preferred measure of inflation because it excludes volatile food and energy prices, rose 1.4%, well within the Fed's comfort range of close to 2%.

--Written by Shanthi Bharatwaj in New York

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