Final first quarter GDP estimate shows 5.4% growth

The Commerce Department’s third and (for the time being) final report on first-quarter 1998 GDP pegged annualized growth at the 5.4% level — much better than the 4.2% and 4.8% gains estimated in the “advance” and “preliminary” reports.

The upward revisions were most significant for exports and for nonresidential building activity. Exports are still seen as having contracted during the first 3-mo of the year, as a strong dollar combined with plunging demand from the Asia/Pacific region. However, the drop was a modest 1.2%, which was considerably less than was originally estimated. Spending for the construction of nonresidential buildings also fell between the fourth quarter of last year and the first quarter of 1998, but by only 3%, not the 7.4% previously estimated.

Inventories were also revised upwards. Total business inventories are now estimated to have grown by $105.7 billion during the first 3-mo of this year — an accumulation that undoubtedly sapped the industrial sector of much of its strength during the second quarter.

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