This just in from the BEA: News Release: Gross Domestic Product and Corporate Profits

Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 0.6 percent in the first quarter of 2007, according to preliminary estimates released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 2.5 percent.

0.6% ???? That is a major revision downward from the advanced number of 1.3% issued last month. It appeared that greater imports, lower government spending and a decline in housing. Of those three, that last two seem to be temporary downturns. As the Washington Post quotes:

The latest report “overstates the weakness of the economy,” said Nariman Behravesh, chief economist with the Global Insight consulting firm. He estimated that a rebound in exports and a rise in business spending mean growth for the current three-month period could be as high as 3 percent.

I’m less optimistic. But, the good news is that business investment seemed to pick up. Investment in equipment and software was up 2% after declining 4.8% in 4Q 2006.
And yes, you read that correctly — software is now counted as a “tangible” investment just like equipment. Of course, what those e GDP numbers don’t show are the real investment levels if you counted spending on other intangibles (like R&D and training) as investments. One step at a time.

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