Posted on 04/26/2013 9:33:04 AM PDT by whitedog57
Q1 Real GDP was released by the BEA this morning. It was a mixture of disappointment and good news (for retailers).
Real GDP grew by 2.5% (annualized), but analysts were expecting 3.0%. So, this was a swing and a miss. According to the BEA, “The acceleration in real GDP in the first quarter primarily reflected an upturn in private inventory investment, an acceleration in PCE, an upturn in exports, and a smaller decrease in federal government spending that were partly offset by an upturn in imports and a deceleration in nonresidential fixed investment.”
Personal consumption expenditures rose 3.2% in Q1, greater than the expected 2.8%.
On the flip side of personal expenditures is the personal savings rate (as a percentage of disposable income). It fell to 2.6% for Q1 from 6.5% in Q4 2012.
Residential construction increased at a 12.6 percent annualized rate, adding 0.3 percentage-point to growth.
Non-residential construction continued its seasonal tradition of slowing down in the first quarter of every year.
The reaction in the Treasury market? The US 10 year Treasury is down 4.5 bps as of noon.
And both the US and German sovereign curves fell today.
So, the US exhibited 2.5% annualized growth in Q1. But the concern is the growth in personal consumption at the expense of savings.
Oh and debt to GDP with the Q1 print is 105%.
I’m getting a bit tired of ‘expectations’ dictating how we should react. Has any expert ‘expectation’ ever been right about any of this crap?
If 2.5% is good, its good ... even if they expected 3.0%. If 2.5% is bad, its bad ... even if they expected 1.5%. Let the numbers speak for themselves, rather than characterizing it based on some half-assed guess that’s never right.
SnakeDoc
There are always at least two adjustments to the GDP growth figures in later months after data is recalculated. If it follows the usual pattern, it will likely be reduced to 2% and then 1.5%. You get the phony inflated number first and then the real number several months later.
New data to ‘rewrite economic history’ (Government about to wave magic wand to add 3% to GDP growth)
http://www.freerepublic.com/focus/f-news/3011307/posts
Data shift to lift US economy 3%
http://www.freerepublic.com/focus/f-news/3010782/posts
Wasn’t a story posted last week, or first of this, reporting that the GDP was expanded to include categories previously excluded?
I don’t recall the details, and don’t know if it was a factor here.
What do we expect when we exported our factory seed corn to the rest of the world? Check what you buy and see where our economy went.
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