US services data suggest upward revision to Q1 GDP

The U.S. economy was probably not as weak as has been reported in the first quarter, with data on Wednesday showing slightly stronger consumer spending than previously estimated.

The Commerce Department's quarterly services survey, or QSS, showed consumption, including healthcare spending, increased at a faster clip than the government had assumed in its second estimate of gross domestic product published last month.

JPMorgan said the data suggested first-quarter consumer spending could be bumped up by at least three-tenths of a percentage point to a 2.1 percent annual rate when the government publishes its third GDP estimate later this month.

That, together with revisions for construction spending, trade and wholesale inventory data, suggests first-quarter GDP could be revised to show it contracting at a 0.2 percent rate instead of the 0.7 percent pace of decline the government reported last month.

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