And Q1 was the bounce back from the 0.4% Q4 print?

So now seems the govt deficit reduction happened in the face of even lower levels than previously thought?

And so the question remains of which agents are going to step up and fill that spending gap, as the ‘demand leakages’ are continuous?

Karim writes:

  • The downward revision was due to PCE services; commercial real estate was revised lower but the contribution from residential real estate was revised higher.
  • The ‘surprise’ was due to the fact that details on PCE services don’t come out until tomorrow
  • Of the 20bn downward revision in PCE services, 15bn was from housing services

From SMR:

We wonder whether the downward revision to the PCE for Housing Services was in the “imputed services rendered by owner occupied housing”. If so such may speak to Chairman Bernanke’s comment during the Q&A following the FOMC meeting wherein he said that the deflator for the imputed portions of the PCE may be too low. We will have a better handle on this tomorrow.

Away from the PCE for Services, there were only minor offsetting revisions, not really worthy of comment

What does the downward revision to Q1 GDP and Q1 PCE for Services imply for Q2 GDP?