GDP Expected To Show Continued Weakness

The U.S. Commerce Department will release the first quarter gross domestic product (GDP) Wednesday at 8:30 a.m. ET, which is expected come in at a slightly negative reading of -0.2, according to Bloomberg. Estimates range from -0.4 to 0.1. GDP is the one of the broadest measure of overall economic activity and includes nearly every sector of the economy.

Today's expected weak GDP data follows on the heels of last quarter's weakness, which showed GDP at -0.7 percent, although many economist pointed to the unusually severe weather, faulty seasonal adjustments and West Coast port strike as special factors contributing to the weakness.

Merrill Lynch analysts are looking for GDP to improve, however, forecasting a rebound to 3.4 percent growth in the second quarter. They say their forecast "reflects stronger consumer spending given the upward revision to March core control retail sales and the QSS survey."

Credit Suisse also looks for renewed GDP growth. They state, "Upward revisions to core retail sales and solid services spending data point to higher consumption growth. Monthly construction data were also revised up. Looking ahead, our latest forecast for Q2 GDP growth is 2.8%."

GDP revisions are due for release on July 30, seasonal factors are expected to be recalculated, which could smooth out the recurring weakness in the first quarters of recent years.