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THURSDAY May 31, 2007 GDP GREW 0.6 PERCENT IN FIRST QUARTER Corporate Profits Growth Slows The economy grew at an annual rate of 0.6 percent in the first quarter, according to the “preliminary” estimates released by the Bureau of Economic Analysis. Based on newly available data that showed a marked reduction in business inventories and a surge in imports in March, the GDP growth rate was revised down 0.7 percentage point from the “advance” estimate of 1.3 percent. BEA also released its first estimate of first-quarter corporate profits. Gross Domestic Product (GDP) The deceleration in first-quarter GDP growth primarily reflected a downturn in net exports. Quarter-to-Quarter Growth in Real GDP 8 Percent 6 4 2 0 II III 2003 IV I II III 2004 IV I II III 2005 IV I II III 2006 IV I 2007 Real GDP growth is measured at seasonally adjusted annual rates. Corporate Profits First-quarter corporate profits increased 6.3 percent from the same quarter a year ago. In the fourth quarter, profits grew 18.3 percent. Profits of financial corporations increased 13.1 percent in the first quarter, and profits of nonfinancial corporations decreased 0.4 percent. Year-over-Year Growth in Corporate Profits 30 25 Percent 20 15 10 5 0 II III 2003 IV I II 2004 III IV I II III 2005 IV I II 2006 III IV I 2007 Corporate profits growth is measured as the percent change from the same quarter one year ago. BEA data—including GDP, personal income, the balance of payments, foreign direct investment, the input-output accounts, and economic data for states, local areas, and industries—are available on the BEA Web site: www.bea.gov. E-mail alerts are also available. NOTE: Additional information that becomes available in the coming weeks will be incorporated in a “final” estimate of first-quarter GDP on June 28, 2007. A revised estimate of corporate profits will also be released. Contact: Ralph Stewart 202–606–2649 Bureau of Economic Analysis, U.S. Department of Commerce