The Commerce Department’s revision for first-quarter gross domestic product (GDP) was even worse than the prior report, and even worse than economists were predicting. The preliminary report was up 0.1% in the first quarter, but this has now been revised to down 1.0% in the first quarter.
Bloomberg was calling for a drop of 0.5% and Dow Jones was calling for a drop of 0.6%.
The prior GDP price index remained static from the preliminary reading at 1.3%. Bloomberg was calling for 1.3% as well.
As a reminder, much of the contraction is blamed on the weather’s impact on production and on consumption. Higher imports and slower inventory growth were also a part of the negative GDP reading.
Another issue is that raw corporate profits are declining. The Commerce Department showed that first-quarter corporate profits on an after-tax basis, without inventory valuation and capital consumption adjustments, were at $1.88 trillion. That was down from $1.905 trillion in the fourth quarter.
The good news about this contraction is that it is expected to be an isolated drop. We have also seen a reversal of many of the trends that were negative going back to positive in the second quarter.
ALSO READ: Countries With the Widest Gap Between Rich and Poor
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
