The second look at Q1 2019 GDP
- Initial reading was 3.2%
- Q4 was 2.2%
- Personal consumption +1.3% vs +1.2% initially
- Q4 personal consumption was +2.5%
- Consumer spending on durables -4.6% vs -5.3% initially
- Business investment +2.3% vs +2.7% initially
- Business investment on equipment -1.0% vs +0.2% initially
- Home investment -3.5% vs -2.8% initially
- Exports +4.8% vs +3.7% initially
- Imports -2.5% vs -3.7% initially
- Net trade added 0.96 to GDP vs 1.03 pp in initial estimate
- Business inventories add 0.6 pp to GDP
- Q1 corporate profits after tax -3.5%
- GDI +1.4%
- GDP price index +0.8% vs +0.9% initially
- Core PCE q/q +1.0% vs +1.3% initially
The drop in business investment and investment in equipment is unwelcome but there isn't a big different between this report and the advance look. I don't see anything that would impact any estimates of Q2 GDP.
The drop in inflation is beginning to get worrisome and if Q2 is soft, the Fed may use inflation as a reason to cut rates later in the year.
