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re: 1st quarter GDP: 3.2%
Posted on 4/26/19 at 5:35 pm to Jrv2damac
Posted on 4/26/19 at 5:35 pm to Jrv2damac
So looking over the data, one thing that struck me as extremely odd was the GDP deflator suddenly dropped from 2.2% over the previous 4 quarters to about 0.65% (annualized) for this quarter.
In other words, nominal GDP over previois quarters grew by about 5.2%, but with the 2.2% deflator, real GDP grew by about 3.0%; however, in this quarter nominal GDP grew by about 3.8%, but the 0.6% deflator, real GDP grew by 3.2%.
Not only is the sudden decrease of almost 1.6% odd, both core measure of inflation (PCE and CPI) have been about 1% to 1.5% higher this quarter. So I would imagine that the deflator will be revised upward, and all else being equal, real GDP would be revised downward, which would be aligned with expectations.
In other words, nominal GDP over previois quarters grew by about 5.2%, but with the 2.2% deflator, real GDP grew by about 3.0%; however, in this quarter nominal GDP grew by about 3.8%, but the 0.6% deflator, real GDP grew by 3.2%.
Not only is the sudden decrease of almost 1.6% odd, both core measure of inflation (PCE and CPI) have been about 1% to 1.5% higher this quarter. So I would imagine that the deflator will be revised upward, and all else being equal, real GDP would be revised downward, which would be aligned with expectations.
This post was edited on 4/26/19 at 5:39 pm
1
Posted on 4/27/19 at 5:50 am to buckeye_vol
inflation does look like it's actually been pretty low over the quarter, though. that deflator may get revised up a bit, but i do doubt that the quarterly rgdp figure gets meaningfully revised down
for me, i'm much more focused on the volatile parts that bumped this up, and on the more fundamental ones that were so weak (particularly consumption, which makes up on average the majority of gdp, and has to over the long-term drive most of its growth).
i don't think consumption will be as weak in q2 as it was in q1. but there could easily be a somewhat nasty snap back in inventories, net exports, and state/local govt spending. if not that, a gradual drag over the year from those things
for me, i'm much more focused on the volatile parts that bumped this up, and on the more fundamental ones that were so weak (particularly consumption, which makes up on average the majority of gdp, and has to over the long-term drive most of its growth).
i don't think consumption will be as weak in q2 as it was in q1. but there could easily be a somewhat nasty snap back in inventories, net exports, and state/local govt spending. if not that, a gradual drag over the year from those things
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