INSTANT VIEW 3-U.S. Q1 GDP revised to +0.6 pct

NEW YORK (Reuters) - The U.S. economy grew at its weakest rate in more than four years during the opening three months of this year as businesses sold off inventories and Americans imported more foreign goods, a Commerce Department report on Thursday showed.

The department revised down its estimate for first-quarter expansion in gross domestic product, or GDP, to 0.6 percent from 1.3 percent that it estimated a month ago. It was the slowest rate of quarterly growth since the fourth quarter of 2002 when the economy edged ahead at a 0.2 percent rate and was below Wall Street economists' forecasts for a 0.8 percent quarterly growth rate.

KEY POINTS: -U.S. first quarter PCE price index +3.3 percent; core PCE +2.2 percent -U.S. first quarter business investment +2.9 percent -U.S. jobless claims fell in latest week

COMMENTARY:

KEN LANDON, G10 CURRENCY STRATEGIST, JPMORGAN CHASE, NEW YORK:

"There might be a little more dollar selling before payrolls tomorrow but not much. People are comfortable in their positioning. I don't think people want to make a commitment before the number tomorrow.

"You could see euro/dollar get a little above $1.35 but no major breakout."

KURT KARL, HEAD OF ECONOMIC RESEARCH, SWISS RE, NEW YORK:

"We had weaker growth, it really slowed down for the quarter. It is probably going to mean good news for the current quarter though, because once you draw down the inventories it is harder to draw them down further, and the change in inventories is at least one part of this weakness. But all the indicators seem to be saying positive growth for the current quarter."

GEORGE GONCALVES, CHIEF INTEREST RATE STRATEGIST FOR

TREASURIES, AGENCIES AND TIPS, MORGAN STANLEY, NEW YORK

"Investors are really looking toward the second quarter more and have moved beyond what the weakness in the first quarter really meant. The fact that we haven't had much of a major move here in the bond market, I wouldn't look to old data to set the direction of future price action. I think people are still forward-looking."

KEITH HEMBRE, CHIEF ECONOMIST, FAF ADVISORS, MINNEAPOLIS

PRELIMINARY GDP: "It was widely expected that it would be revised down. The Fed kind of dismissed it yesterday; they expect growth to rebound to trend by 2008. Based on the stock run-up in recent months, the stock market has bought that outlook hook-line-and-sinker.

Growth will be a bit of a disappointment regarding those expectations. I'm a bit skeptical because I don't think the housing correction is over yet.

Still, the trade gap and inventory will be a lot less of a drag in the second quarter which should be offset by much slower pace of consumption. My number is 2.0 to 2.5 percent for the second-quarter GDP."