Everything’s Relative

GDP growth in the first quarter of this year was just revised upward to a very robust 5.3%. Yet a lot of analysts are disappointed:

WASHINGTON (MarketWatch) — The U.S. economy grew at a 5.3% annual rate in the first quarter, the Commerce Department said Thursday in its first revision of gross domestic product estimates. A month ago, the government agency estimated real (inflation-adjusted) growth in the period January through March at an annualized 4.8%.

The upward revision was not as large as expected. Economists were expecting an upward revision to 5.6%, according to a survey conducted by MarketWatch.

…The upward revision was largely due to higher inventory investment and a lower trade deficit than the government had initially estimated. Commerce said that lower consumer spending on electricity and natural gas over the winter and weaker investment in equipment and software offset some of the upward revision.

“In my view, the report as a whole is at the margin disappointing. We had looked for a higher Q1 growth figure, and the shortfalls were in the two most important categories, consumption and business investment,” said Stephen Stanley, chief economist at RBS Greenwich Capital.