25 May 2006, 16:18  U.S. GDP expected to point higher during the first quarter

The Government will revise its forecasts for U.S. Q1 GDP. The advanced GDP was initially reported up 4.8%, but is expected to show a significant upward revision of 5.7% pace in this quarter due to the update on international trade flows and inventories. "We look for Q1 real GDP growth to be revised up by 1 point to a 5.8% annual rate. The change in business inventories will be revised higher as will real net exports," stated Mike Carey, currency strategist at Calyon. "Personal consumption spending is also expected to be revised higher and the construction data point to a faster pace of residential and non-residential building. No material changes are expected to the deflator," he added. "Our tracking estimate for Q2 real GDP growth is running around 3%," Carey concluded.

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