This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.theguardian.com/business/live/2019/apr/26/us-gdp-growth-donald-trump-slowdown-daimler-rbs-business-live
The article has changed 14 times. There is an RSS feed of changes available.
| Version 8 | Version 9 |
|---|---|
| US economy smashes forecasts with 3.2% growth, but spending cools - business live | US economy smashes forecasts with 3.2% growth, but spending cools - business live |
| (32 minutes later) | |
| Donald Trump’s political allies are cheering today’s GDP report (and not digging into the problems economists have spotted). | |
| ➡️ "Beautiful"➡️ "Strong"➡️ "Extraordinary"➡️ "Incredible"That's the Trump effect. 3.2% GDP for the first quarter, and no sign of slowing down. https://t.co/tj5Sm4LwGT | |
| Donald Trump’s top economic adviser Larry Kudlow is discussing the growth report on CNBC now. | |
| He says the 3.2% growth rate is strong, and a positive sign of Trump’s handling of the economy. | |
| But he then goes on to suggest that interest rates may need to be cut, due to slowing inflation.... | |
| First White House reaction to GDP report: Kudlow: It's a blowout number; It's extremely positive; The inflation rate continues to slip lower and lower; Could be a rate cut on the way --CNBC | |
| Larry Kudlow is calling for a rate cut on @CNBC after GDP growth picked up to 3,2% in Q1. This will be a fun summer for the #FederalReserve | |
| Currency analyst Marc-André Fongern, though, argues that America’s economy is too strong to justify interest rate cuts. | |
| The details are telling us GDP data is mixed. Ok, but the U.S. just expanded 3.2% while the rest of the world, especially Europe is fragile. | |
| The US dollar is still the pole position starter...Please, end the talk of rate cuts. | |
| Strong job market, strong GDP growth compared to Europe (Germany)...Of course there is something on the horizon which suggests that Q2 GDP isn't going to be as good as Q1, but the elimination of rate cut talks is a bullish factor for the USD in an unsteady G10 world. https://t.co/l2wWV4MBtL | |
| Jason Furman, who chaired President Obama’s Council of Economic Advisers, also urges caution about the growth figures: | Jason Furman, who chaired President Obama’s Council of Economic Advisers, also urges caution about the growth figures: |
| First quarter GDP is 3.2% but the underlying data is much weaker and is consistent with a slowing economy. | First quarter GDP is 3.2% but the underlying data is much weaker and is consistent with a slowing economy. |
| GDP is volatile so this is weak signal. But to the degree today’s data has any info it is that the underlying trend of consumption and investment is weakening. And no reason to believe we’ll get lucky again next quarter with inventories, NX, and govt. | GDP is volatile so this is weak signal. But to the degree today’s data has any info it is that the underlying trend of consumption and investment is weakening. And no reason to believe we’ll get lucky again next quarter with inventories, NX, and govt. |
| Paul Ashworth of Capital Economics isn’t impressed with the blowout US growth report. | Paul Ashworth of Capital Economics isn’t impressed with the blowout US growth report. |
| He argues that the underlying picture is weaker than the 3.2% headline growth figure suggests, once you strip out certain elements: | He argues that the underlying picture is weaker than the 3.2% headline growth figure suggests, once you strip out certain elements: |
| Taking out the over-sized boosts from net trade, inventories and highways investment, which will all be reversed in the coming quarters, growth was only around 1.0%. | Taking out the over-sized boosts from net trade, inventories and highways investment, which will all be reversed in the coming quarters, growth was only around 1.0%. |
| Under those circumstances, we continue to expect that overall growth will slow this year, forcing the Fed to begin cutting interest rates before year-end. | Under those circumstances, we continue to expect that overall growth will slow this year, forcing the Fed to begin cutting interest rates before year-end. |
| The bottom line is that today’s US growth report appears better than expected, but there are some concerns under the surface - mainly due to falling consumer spending, and the inventory build-up already discussed. | The bottom line is that today’s US growth report appears better than expected, but there are some concerns under the surface - mainly due to falling consumer spending, and the inventory build-up already discussed. |
| Here are the key points: | Here are the key points: |
| US real GDP: Grew at an annualised rate of 3.2%, stronger than expected. | US real GDP: Grew at an annualised rate of 3.2%, stronger than expected. |
| Consumer spending: Growth slowed to just 1.2% | Consumer spending: Growth slowed to just 1.2% |
| Business investment: Up by +2.7%, thanks to spending on intellectual property. | Business investment: Up by +2.7%, thanks to spending on intellectual property. |
| Residential construction: Fell by 2.8%, the fifth decline in a row. | Residential construction: Fell by 2.8%, the fifth decline in a row. |
| Government investment: Up by 2.4%, due to higher spending by states and local governments | Government investment: Up by 2.4%, due to higher spending by states and local governments |
| Net trade: Added 1% point to the growth rate, due to rising exports and falling imports. | Net trade: Added 1% point to the growth rate, due to rising exports and falling imports. |
| Inventories: stockpiling added 0.65% points to the growth rate | Inventories: stockpiling added 0.65% points to the growth rate |
| Gregory Daco of Oxford Economics sums it up: | Gregory Daco of Oxford Economics sums it up: |
| In reading this Q1 #GDP report, be careful: final sales were up more modest 2.5% (saar) w/ inventory accumulation adding 0.65pp. Risk is Q2 inventory drag.Overall, GDP momentum +3.2% y/y in Q1 -- faster than 3% y/y in Q4, but consumer, business, residential spend cooling pic.twitter.com/marznhhN7U | In reading this Q1 #GDP report, be careful: final sales were up more modest 2.5% (saar) w/ inventory accumulation adding 0.65pp. Risk is Q2 inventory drag.Overall, GDP momentum +3.2% y/y in Q1 -- faster than 3% y/y in Q4, but consumer, business, residential spend cooling pic.twitter.com/marznhhN7U |
| The New York Times’s Ben Casselman has dug into the GDP report, to show how US consumer demand is slowing (even as the headline growth rate picks up) | The New York Times’s Ben Casselman has dug into the GDP report, to show how US consumer demand is slowing (even as the headline growth rate picks up) |
| In fact, this was the weakest performance for final private demand since 2013. pic.twitter.com/BCOIJfZWmF | In fact, this was the weakest performance for final private demand since 2013. pic.twitter.com/BCOIJfZWmF |
| A fall in imports has also boosted US growth - perhaps a sign that the Trump trade war is dampening demand for overseas goods. | A fall in imports has also boosted US growth - perhaps a sign that the Trump trade war is dampening demand for overseas goods. |
| Here’s an excellent chart showing how net trade boosted US GDP: | Here’s an excellent chart showing how net trade boosted US GDP: |
| Chart for the UK audience. US GDP growth of 0.8%q/q in Q1 2019, with half of the contribution to growth coming from inventories & net trade (predominantly via falling imports). Household consumption contributed 0.2% & private investment 0.1%. pic.twitter.com/qd6tjcTSv7 | Chart for the UK audience. US GDP growth of 0.8%q/q in Q1 2019, with half of the contribution to growth coming from inventories & net trade (predominantly via falling imports). Household consumption contributed 0.2% & private investment 0.1%. pic.twitter.com/qd6tjcTSv7 |
| Some of the initial excitement is fading, as analysts dig into the US growth report. | Some of the initial excitement is fading, as analysts dig into the US growth report. |
| The headline number is certainly stronger than expected....but there’s concern that inventory-building contributed to growth. | The headline number is certainly stronger than expected....but there’s concern that inventory-building contributed to growth. |
| That’s a problem, because companies typically run those inventories down again, which hits growth. | That’s a problem, because companies typically run those inventories down again, which hits growth. |
| Fab Q1 GDP print (3.2pc)...till you look under the hood and kick the tires. Inventory buildup will have to be unwound (which will drag on growth), imports were weak (everyone front ran the tariffs last year) and defence spending was strong (but rest of govt spending weak). | Fab Q1 GDP print (3.2pc)...till you look under the hood and kick the tires. Inventory buildup will have to be unwound (which will drag on growth), imports were weak (everyone front ran the tariffs last year) and defence spending was strong (but rest of govt spending weak). |
| Wall Street is cheering these growth figures, as investors and analysts reassess the state of the US economy. | Wall Street is cheering these growth figures, as investors and analysts reassess the state of the US economy. |
| Futures pop after Q1 GDP reading blows past estimates https://t.co/tRW2nyzvBX pic.twitter.com/OtXHNtuIbF | Futures pop after Q1 GDP reading blows past estimates https://t.co/tRW2nyzvBX pic.twitter.com/OtXHNtuIbF |
| Q1 #GDP much better than expected. What happened to “residual seasonality” and more importantly the negative effects of the government shutdown and US-China #tradewar? Could GDP have been over 4% if these factors were at play? https://t.co/ZhiS34Z7Az | Q1 #GDP much better than expected. What happened to “residual seasonality” and more importantly the negative effects of the government shutdown and US-China #tradewar? Could GDP have been over 4% if these factors were at play? https://t.co/ZhiS34Z7Az |
| America’s habit of using annualised growth rates can be confusing for the rest of us. | America’s habit of using annualised growth rates can be confusing for the rest of us. |
| But a 3.2% annualised growth rate simply means the US grew by 0.8% in the first quarter. | But a 3.2% annualised growth rate simply means the US grew by 0.8% in the first quarter. |
| That’s likely to be rather better than international rivals (we don’t have UK or eurozone growth figures for Q1 yet). | That’s likely to be rather better than international rivals (we don’t have UK or eurozone growth figures for Q1 yet). |
| Good news for the US! "Real gross domestic product (GDP) increased at an annual rate of 3.2 percent in the first quarter of 2019" Or as we would put it GDP rose by 0.8% in the quarter putting the US in the front rank right now. | Good news for the US! "Real gross domestic product (GDP) increased at an annual rate of 3.2 percent in the first quarter of 2019" Or as we would put it GDP rose by 0.8% in the quarter putting the US in the front rank right now. |
| A 3.2-percent first quarter GDP print shows that the United States remains the cleanest, meanest...dirty shirt in the global economy - slowing, but not as much as its major counterparts. The dollar's rally remains confoundingly intact. | A 3.2-percent first quarter GDP print shows that the United States remains the cleanest, meanest...dirty shirt in the global economy - slowing, but not as much as its major counterparts. The dollar's rally remains confoundingly intact. |
| More key points from the US GDP report: | More key points from the US GDP report: |
| US Q'1'19 GDP: Top line up 3.2%, real final sales 2.5%, final sales to domestic purchasers 1.4% final sales to private domestic purchasers 1.3%. Driven by massive increase of $128.4 billion in inventories which is not sustainable. Trade deficit narrowed. | US Q'1'19 GDP: Top line up 3.2%, real final sales 2.5%, final sales to domestic purchasers 1.4% final sales to private domestic purchasers 1.3%. Driven by massive increase of $128.4 billion in inventories which is not sustainable. Trade deficit narrowed. |
| #GDP imports fall sharply in quarter, drop adds 0.58 pp to GDP growth | #GDP imports fall sharply in quarter, drop adds 0.58 pp to GDP growth |
| America’s growth in the last quarter was driven by a pick-up in trade, and a swelling in company inventories. | America’s growth in the last quarter was driven by a pick-up in trade, and a swelling in company inventories. |
| The Commerce Department also reports that government investment also rise, which also helped to push growth up to an annual rate of 3.2%. | The Commerce Department also reports that government investment also rise, which also helped to push growth up to an annual rate of 3.2%. |
| Trade & inventories help Q1 real #GDP to top forecasts at 3.2% | Trade & inventories help Q1 real #GDP to top forecasts at 3.2% |
| However, consumers and companies seem to have throttled back. | However, consumers and companies seem to have throttled back. |
| Consumer spending growth slowed to 1.2%, from 2.5% in Q4 2018, while business spending on equipment only grew by 0.2% - the weakest growth since autumn 2016. | Consumer spending growth slowed to 1.2%, from 2.5% in Q4 2018, while business spending on equipment only grew by 0.2% - the weakest growth since autumn 2016. |
| Oh you beauty. US 1Q #GDP up 3.2% annualized. Above the top end of a very wide range of forecasts. | Oh you beauty. US 1Q #GDP up 3.2% annualized. Above the top end of a very wide range of forecasts. |
| NEWSFLASH: America’s economic growth accelerated sharply in the first quarter of this year. | NEWSFLASH: America’s economic growth accelerated sharply in the first quarter of this year. |
| GDP expanded at an annual rate of 3.2% in January-March -- up from an annual rate of 2.2% in the final three months of 2018. | GDP expanded at an annual rate of 3.2% in January-March -- up from an annual rate of 2.2% in the final three months of 2018. |
| That’s a much stronger result than the 2.2% which economists had expected. A good sign for the global economy? | That’s a much stronger result than the 2.2% which economists had expected. A good sign for the global economy? |
| More to follow... | More to follow... |