Economists have said that GDP growth is now tracking over 3% in the first quarter, after a revised 0.4% growth in Q4.
But numerous economic indicators suggest that a spring slowdown in underway.
Here’s a quick look at some of the recent disappointing data:
- Headline industrial production increased 0.4% in March. But MacroEconomic Advisers writes that this was because “unusually cold weather in March (a 2-standard-deviation event), following normal temperatures in February, led to a surge in utilities IP that added roughly 0.5 percentage point to the change in total IP.”
- America’s manufacturing Renaissance also looks to be a way off. In April the Empire Fed manufacturing survey fell to 3.05 missing expectations.
- Retail sales unexpectedly fell 0.4% in March. Part of this was because of temporary factors like adverse tax conditions, and delayed tax returns. But Nomura pointed out that the downward revisions to sales in the last two months showed that “consumer adjustment to lower disposable income at the start of the year has begun.”
- Moreover, consumer confidence also missed expectations and fell to 72.3 in April, from 78.6 in March.
- Housing, which has been a huge part of the economic recovery, is also showing signs of stalling. Building permits are down, homebuilder confidence is down, foreclosure starts are up, and capacity constraints among mortgage lenders are also impacting the recovery.
- And of course there is the jobs report, which showed that only 88,000 new jobs were created in March, very shy of expectations for 190,000. The unemployment rate fell to 7.6% but this was because of a decline in the labour force participation rate.
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