The Bureau of Economic Analysis (BEA) “advance” estimate for first quarter (Q1) 2019 gross domestic product (GDP) came in at a 3.2% seasonally-adjusted annual rate (SAAR). Real GDP rose 2.2% in Q4 2018 and by 2.2% in Q1 2018.
The consensus forecast was calling for a more moderate but still solid 2.3% SAAR.
*Chart will update to reflect advance estimate. It initially reflects forecast.
|Seasonally-Adjusted Annual Rate (SAAR)||Prior||Consensus Forecast||Forecast Range||Actual|
|Real GDP – Q/Q ∆||2.2%||2.3%||1.4% — 2.8%||3.2%|
|GDP Core Price Index – Q/Q ∆||2.0%||1.6%||1.3% — 2.2%||1.3%|
|GDP Price Index – Q/Q ∆||1.7%||1.7%||1.2% — 2.8%||0.9%|
|Real Consumer Spending – Q/Q ∆||2.5%||1.1%||0.3% — 2.6%||1.2%|
The BEA will release a more complete “second estimate” for Q1 2019 GDP — along with Corporate Profits — on May 30. The final and “third estimate” to the former and a revision to the latter is scheduled to be released on June 27.
“The last trade deficit report coming in below -$50B was a bigger deal than expected,” Tim Anderson at TJM Investments said.
The U.S. trade deficit fell below $50 billion in February at $49.4 billion, down $1.8 billion from $51.1 billion and easily beating the forecast. It was the first dip below the $50-billion threshold since June 2018.
“This really highlights the difference between ‘academic economists’ and ‘business economists’,” Mr. Anderson added. “While the NY FED had an estimate of +1.8%, the Atlanta FED GDPNow forecast was +2.7%.”
“Clearly, the NowCast model was much more responsive to the rapidly improving economic data released in March and April.”
Current dollar GDP rose a solid 3.8%, or $197.6 billion, in Q1 2019 to $21.06 trillion. That’s down only slightly from 4.1%, or $206.9 billion in Q4 2018.
Worth noting, this beat doesn’t reflect what turned out to be stronger-than expected consumer spending.
The price index for gross domestic purchases increased 0.8 percent in the first quarter, compared with an increase of 1.7 percent in the fourth quarter (table 4). The PCE price index increased 0.6 percent, compared with an increase of 1.5 percent. Excluding food and energy prices, the PCE price index increased 1.3 percent, compared with an increase of 1.8 percent.
Current-dollar personal income rose $147.2 billion in Q1 2019 juxtaposed to an increase of $229.0 billion in Q4 2018, largely the result of personal interest income, personal dividend income and proprietors’ income.
That decline was only in part offset by an acceleration in personal current transfer receipts.
Disposable personal income (DPI) increased $116.0 billion, or 3.0%, in Q1 2019, compared with an increase of $222.9 billion, or 5.8%, in Q4 2018. Real disposable personal income rose 2.4% versus a 4.3% increase the prior quarter.
Personal saving was $1.11 trillion in Q1 2019, up from $1.07 trillion in Q4 2018. The personal saving rate — defined as personal saving as a percentage of disposable personal income — inched up to 7.0% in Q1 2019. It came in at 6.8% in Q4 2018.