The pace of U.S. GDP growth decelerated sharply to just 0.1% in Q1 from 2.6% in Q4. This was much lower than the 1.2% expected by economists.
There are obviously a lot of moving parts to the GDP report consider before jumping to any major conclusions. But the bottom line is that the growth grinded sharply lower.
But that’s not holding back some glass-half-full statements from Wall Street.
There’ll Be Revisions!
“Q1 GDP is highly preliminary. There will be three more revisions to these figures between now and the end of July,” tweeted Deutsche Bank’s Joe LaVorgna.
It’s The Past!
“0.1% GDP is history, and it’s a good thing too. Forget about it. What’s up next?” said Bank of Tokyo-Mitsubishi’s Chris Rupkey.
There’s Better News Ahead!
“On the investment side, while this is clearly a more weaker than expected number, there are a number of more forward looking indicators that are actually quite encouraging so we wouldn’t be too worried abt this particular number,” said Goldman Sachs’ Jan Hatzius.
All three quotes aren’t mutually exclusively.
Many economists have flagged the weak investment numbers as a concern. However, it seems to belie the encouraging signs from other indicators, as Hatzius notes. Commercial and industrial loans are on the rise, and we recently learned durable goods orders were much stronger than expected.
Overall, the takeaway from Wall Street’s economists is similar to what we’ve heard since the beginning of the year: it was the unusually bad weather, and things should get better.
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