We were bracing for a soft Q1 GDP print this morning, primarily due to a sharp slowdown in real consumer spending in the first quarter.
We got the drop we forecast, as real consumer spending growth slumped to 1.1% from a 4.0% annualized growth rate in Q4.
For more on this, see highlights of my report below, followed by a link to the full U.S. Outlook, delivered on April 27.
- The decline in consumer spending was driven by a 3.3% decline in durable goods spending, primarily motor vehicles.
- Business equipment spending also came out on the weak side.
- We expect the drop in real consumer spending growth in Q1 to be partially reversed in the second quarter as recharged savings, pent-up demand, and lower credit card balances entice consumers to spend more freely.
- Our forecast for Q2 GDP growth improved to 3.0% from 2.6% prior to today’s release.
Over the last three quarters, the U.S. economy and real GDP have been on a sprint, the latter rising at an annual average 3.06%.Read More ›
Where did all the shoppers go? Coming off a heady fourth quarter when consumers couldn’t find an item they didn’t want to purchase, the consumer appeared to be knocked‐out in the first quarter.Read More ›
More signs emerged this week that the Goldilocks view of the U.S. economic outlook could be in for a serious challenge in the weeks ahead.Read More ›
It’s not only the stock market that’s throwing off more mixed signals and increased volatility these days.Read More ›