The U.S. Bureau of Economic Analysis revised first-quarter GDP growth upward to an annualized rate of 2.1% in its final estimate, surpassing the 1.6% second estimate and the consensus forecast of 1.6%. The revision was primarily driven by stronger-than-expected consumer spending and business investment in technology. Corporate profits for the first quarter were also revised, following a preliminary increase of $40.4 billion, as the broader economy demonstrated greater underlying momentum than initially reported.
In May, personal income rose 0.4%, matching market expectations. The Core Personal Consumption Expenditures (PCE) price index—the Federal Reserve's preferred inflation gauge—increased 0.2% month-over-month and 3.3% year-over-year, both in line with consensus. Robust economic activity coupled with persistent inflation has maintained pressure on the Fed, with markets now pricing in a 65% probability of a September interest rate hike.