personal consumption expenditures excluding food and energy -- increased at a 2.2 percent annual rate in the first quarter, the same as estimated last month, following a 1.7 percent rate of advance in the fourth quarter. The revised GDP report offered a first look at corporate profits for the period. Profits after taxes, calculated at an annual rate, were running at $983 billion in the first three months of 2005, up from $973 billion in the fourth quarter. But the rate of increase in after-tax profits slowed to 1 percent from a sharp 12.5 percent jump in the fourth quarter, when profits were rebounding from a contraction during the third quarter. The red-hot housing sector, which has contributed solidly to the economy's steady growth, showed every sign of continuing to do so. The GDP report said residential investment increased at a revised 8.8 percent annual rate in the first quarter, up from 5.7 percent estimate a month ago and more than twice the 3.4 percent pace during the final three months of 2004. Reports since first-quarter GDP was compiled show that homebuilding and sales of both existing and new homes continued to power ahead during the second quarter, raising some concerns among Fed policy-makers that a housing price "bubble" may eventually develop in parts of the country. --SP 0046 Local Time 2146 GMT
