Describe the current status of the US economic indicators: GDP and Producer Price Index; present a separate graph illustrating their historic trends, and give an 18-month forecast for each indicator.
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In the first quarter of 2005, the growth of real gross domestic product (GDP) decelerated somewhat from the growth in the fourth quarter of 2004, according to the “preliminary” estimates of the national income and product accounts (NIPAs) (table 1 and chart 1). The GDP growth rate for the first quarter was 0.4-percentage point higher than that reported in the “advance” estimates released in April. Inflation was the same as in the fourth quarter. Despite the upward revision to GDP, the picture shown by the preliminary estimates is similar to that shown by the advance estimates.
Real GDP increased 3.5 percent in the first quarter after increasing 3.8 percent in the fourth quarter. The first-quarter advance estimates had shown a 3.1-percent increase. The largest contributor to the upward revision in GDP growth was a downward revision to imports (which are subtracted in the calculation of GDP) that was partly offset by a downward revision to inventory investment.
The small first-quarter deceleration in real GDP growth mainly reflected slowdowns in business investment in equipment and software and in consumer spending. These slowdowns were partly offset by a …