Economic Roundup and Dr. Joe's Clogged Mailbox

GDP for the first quarter of 2005 was revised up. The advance estimate for Q1 was +3.1%, and the preliminary estimate was just revised to 3.5%. I didn't think it would go up that much since it looked like things were slowing a bit, though still growing. Recent revisions to employment data began to indicate that the advance estimate was too low. My net new business indicator was also very bullish, another sign that the advance estimate GDP growth was underestimated. Much of the underestimation of GDP is the result of the lack of good tools to measure small and mid-size business activity.

Corporate profits were up 4.5%, and net corporate cash flow, the more important number, was up 7.4%, compared to the last quarter. Corporate taxes are up 33% compared to Q1-04. Proprietor’s income was up 2.9%, but was up 10.3% compared to Q1-04. Current dollar GDP (unadjusted for inflation) was 6.7%.

I'm still expecting real GDP to be at +3.5 to +4.25% this year overall.

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About Dr. Joe Webb

Dr. Joe Webb is one of the graphic arts industry's best-known consultants, forecasters, and commentators. He is the director of WhatTheyThink's Economics and Research Center.

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