GDP Revised Up, Jobless Claims Dip

By John S. McClenahen Using more complete data than it had a month ago, the U.S. Commerce Department's Bureau of Economic Analysis (BEA) has revised first-quarter GDP growth upward -- although not by quite as much as economists generally expected. The BEA now says that the output of goods and services produced by labor and property in the U.S. from January through March increased at an annual rate of 4.4%. Previously it put the rate at 4.2%. A larger trade deficit, faster inventory accumulation and slower investment spending figured prominently in the revision, says Merrill Lynch & Co., New York. The revised growth rate of 4.4% is healthy by virtually any standard -- although it was a tenth of a percentage point below the 4.5% the markets had anticipated. Meanwhile, after a few weeks of increases, initial claims for unemployment insurance are down. Last week, jobless claims fell to 344,000, down 3,000 from the previous week's revised figure of 347,000, the U.S. Labor Department reported on May 27. The department's four-week moving average for initial claims, still reflecting recent increases, rose to 335,500 last week, some 1,500 higher than the previous week's revised average of 334,000. Economists are now looking to next week's report on May employment report for a better reading of the U.S. labor market. Payroll gains of 200,000 or better are being forecast.

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