Final GDP Growth Reading for Q1 Stands at 0.7%

The U.S. Department of Commerce said Thursday that economic growth in the first quarter of 2007 had been revised up slightly in the final reading of the figure.  The official GDP growth rate for Q1 2007 will stand at 0.7 percent.

The Commerce Department issues preliminary gross domestic product readings a month after the end of each quarter and follows the initial reading up with two revisions once more numbers are finalized and rechecked.

Commerce originally reported a tepid GDP growth rate of 1.3 percent from January to March this year in its initial report in April.  Last month, the reading went from tepid to ice-cold when the agency revised the reading to 0.6 percent, scaring many economists who felt the reading was much too low.

Economists polled by both Reuters and Marketwatch expected the final reading to be revised upward.  The consensus was that 0.8 percent would be the final number.  So the final reading fell short of expectations.

The GDP numbers for Q1 2007 follow a fairly moderate Q4 2006 growth rate of 2.5 percent.  Over the past four quarters, the economy has grown at a rate of only 1.9 percent, though, the slowest rate for a four-quarter period in four years.

Economists are now focusing on the current second quarter, which ends weekend.  The picture, they say, is much rosier, with expectations for GDP growth in the mid-3 percent range.  "The revisions do not alter our view that the economy is likely to expand at about a 3.2% rate or so, in the nearly complete second quarter," wrote Joe Liro, an economist for Stone & McCarthy Research, in a note to clients obtained by Marketwatch.