Although bettering earlier estimates of 2004 first quarter GDP growth, the 4.4% annual rate released yesterday was countered by other less positive measures of the US economy.

Compared with the final quarter of last year, Q1 represents a growth reduction, but is still seen as a vast improvement on the average growth rate of 3.3% over the last twenty years.

A first quarter decline in business investment and software accounted for much of the downtrend in growth, although state and local government expenditure and inventory restocking exceeded expectations.

In a similar trend, the rise in US listed and non-listed company profits of 1.2% was less rapid than those of the latter half of 2003 (9.9% and 7.2% for the third and fourth quartiles respectively).

According to Ted Wieseman of Morgan Stanley, higher costs of raw materials are partly to blame, together with the recent upturn of the US dollar and its concomitant dampening of the overseas profits of US companies.

This corresponds with a tempered first quarter rise of 23% in net company income to $159.2 billion (£86.7 billion; €130.2 billion). The figure is based on results from 1,488 companies in Dow Jones' US Total Market Index and compares to a more than 50% rise in 2003.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff