Recent Updates
- Global Supply Chain Pressure Index (Mar, Apr)
- US: Job Openings and Labor Turnover Survey by State (Mar)
- US: New Residential Construction (Apr)
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- more updates...
Economy in Brief
U.S. Industrial Production Much Stronger than Expected in April
The increase in manufacturing output in April was once again led by motor vehicle and parts production...
U.S. Retail Sales Posted Solid Rise in April
Notwithstanding falling real incomes and declining confidence measures, consumer spending posted a solid increase...
U.S. Home Builder Index Took a Steep Drop in May
This is the fifth straight month that builder sentiment has declined...
U.S. Empire State Manufacturing Index Declines in May
The Empire State Manufacturing Index of General Business Conditions dropped thirty-six points...
Surging Imports Send the EMU Trade Scene Deeper into Deficit
The trade balance for the Euro Area fell sharply to 17.5 billion euros in March...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
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"Core" GDP Suggests Economy Gained Momentum in Q1:2022
by Tom Moeller May 30, 2019
Gross domestic product, adjusted for price inflation, increased 3.1% during Q1'19, revised from 3.2%. Despite the revision, the 3.2% rate of growth during the last four quarters remained the strongest increase since Q2'15. The rise compared to expectations for a 3.0% increase in the Action Economics Forecast Survey. Inventory and fixed investment estimates were reduced.
After-tax corporate profits with inventory and capital consumption adjustments declined $72.8 billion (+1.9% y/y), the first decline since Q3'16. Before-tax profits with IVA & CCA fell $65.3 billion (+3.1% y/y). Domestic nonfinancial profits fell $62.0 billion (+7.0% y/y), the first decline since Q3'17. Profits earned abroad were off $10.8 billion (-2.5% y/y), the first decline since Q2'17, but earnings in the domestic financial sector gained $7.5 billion (-1.7% y/y).
The contribution to growth in real GDP from inventory investment was lessened to 0.6 percentage points from 0.7 following a 0.1 percentage point addition in Q4'18. Improvement in the foreign trade deficit added an unrevised 1.0 percentage points to growth following two quarters of subtraction. Export growth of 4.8% (2.6% y/y) was the largest gain since Q2'18. Imports fell a lessened 2.5% (+2.0% y/y).
Growth in final sales to domestic purchasers fell to 1.5% (2.6% y/y), revised from 1.4% and remained the weakest rate of growth since Q4'15. Consumer spending rose 1.3% (2.8% y/y), the weakest rise in a year. A 4.6% decline (+2.7% y/y) in durable goods demand was led by a 15.9% decline (-1.2% y/y) in motor vehicle & parts sales. Demand for home furnishings & household equipment fell 2.1% (+1.3% y/y), off for the second straight quarter. These declines were offset by an increase in sales of recreational goods & vehicles of 6.9%, both q/q and y/y. Nondurable product sales increased 2.0% (3.1% y/y). The rise centered in the "other" category, as apparel & shoes demand fell 4.9% (+3.9% y/y). Food & restaurant sales declined 1.6% (+1.3% y/y) and demand for gasoline & oil held steady (1.0% y/y). Demand for services increased 2.1% (2.7% y/y) as transportation sales surged 4.2% (0.9% y/y) and demand for financial services & insurance strengthened 3.5% (2.0% y/y). Health care services demand rose a strong 4.7% (2.9% y/y) and housing & utilities purchases rose 1.3% (1.6% y/y). Offsetting these increases was a 1.6% decline (+0.6% y/y) in the demand for recreation services, the second decline in three quarters.
Business fixed investment grew a little-changed 2.3% (4.7% y/y) after a 5.4% strengthening in Q4'18. Investment in structures increased 1.7% (2.0% y/y) after two quarters of decline. Equipment demand fell a weakened 1.0% (+3.3% y/y) as an 8.1% decline (+2.4% y/y) in "other" equipment offset a 6.2% rise in transportation equipment purchases. Investment in intellectual property products surged 7.2% (8.5% y/y). Industrial equipment sales declined 2.9% (+2.1% y/y) and demand for information processing equipment was little changed (3.5% y/y).
Holding back the gain in overall demand was a 3.5% decline (-3.3% y/y) in residential investment, which has been declining since its peak in Q4'17.
Government expenditures grew at an improved 2.5% rate (1.8% y/y). State & local government spending growth of 4.0% (1.6% y/y) was accompanied by a 0.1% easing (+2.0% y/y) in federal government expenditures. A 4.0% jump (5.3% y/y) in defense spending offset a 5.9% decline (-2.5% y/y) in nondefense outlays.
The GDP chain price index increased 0.8% (1.8% y/y), the weakest rise in three years. It compared to a 0.9% expected gain. The PCE chain price index increase of 0.4% (1.4% y/y) was underpinned by a 1.0% rise (1.6% y/y) in the index excluding food & energy. The business fixed investment price index rose 1.5% (1.5% y/y) and the residential price index gained 2.5% (4.0% y/y. The government spending price index increased 1.1% (2.3% y/y).
The GDP figures can be found in Haver's USECON and USNA database. USNA contains virtually all of the Bureau of Economic Analysis' detail in the national accounts. Both databases include tables of the newly published not seasonally adjusted data. The Action Economics consensus estimates can be found in AS1REPNA.
Is There Too Much Business Debt? from the Federal Reserve Bank of New York can be found here.
Chained 2012 $ (%, AR) | Q1'19 (Second Estimate) | Q1'19 (Advance Estimate) | Q4'18 | Q3'18 | Q1'19 Y/Y | 2018 | 2017 | 2016 |
---|---|---|---|---|---|---|---|---|
Gross Domestic Product | 3.1 | 3.2 | 2.2 | 3.4 | 3.2 | 2.9 | 2.2 | 1.6 |
Inventory Effect (%-point) | 0.6 | 0.7 | 0.1 | 2.3 | 0.5 | 0.1 | 0.0 | -0.5 |
Final Sales | 2.5 | 2.5 | 2.1 | 1.0 | 2.7 | 2.7 | 2.2 | 2.1 |
Foreign Trade Effect (%-point) | 1.0 | 1.0 | -0.1 | -2.0 | 0.1 | -0.2 | -0.3 | -0.3 |
Domestic Final Sales | 1.5 | 1.4 | 2.1 | 2.9 | 2.6 | 2.9 | 2.5 | 2.3 |
Personal Consumption Expenditure | 1.3 | 1.2 | 2.5 | 3.5 | 2.8 | 2.6 | 2.5 | 2.7 |
Nonresidential Fixed Investment | 2.3 | 2.7 | 5.4 | 2.5 | 4.7 | 6.9 | 5.3 | 0.5 |
Residential Investment | -3.5 | -2.8 | -4.7 | -3.5 | -3.3 | -0.3 | 3.3 | 6.5 |
Government Spending | 2.5 | 2.4 | -0.4 | 2.6 | 1.8 | 1.5 | -0.1 | 1.4 |
Chain-Type Price Index | ||||||||
GDP | 0.8 | 0.9 | 1.7 | 1.8 | 1.8 | 2.2 | 1.9 | 1.1 |
Personal Consumption Expenditure | 0.4 | 0.6 | 1.5 | 1.6 | 1.4 | 2.0 | 1.8 | 1.1 |
Less Food & Energy | 1.0 | 1.0 | 1.8 | 1.6 | 1.6 | 1.9 | 1.6 | 1.7 |
Nonresidential Investment | 1.5 | 1.3 | 1.1 | 1.6 | 1.5 | 1.2 | 0.7 | -0.8 |
Residential Investment | 2.5 | 1.8 | 2.6 | 3.6 | 4.0 | 5.6 | 4.5 | 3.6 |