U.S. economy grows by 3.2% in the first quarter, topping expectations

“The U.S. economy grew at a faster pace than expected in the first quarter and posted its best growth to start a year in four years,” Fred Imbert reports for CNBC. “First-quarter gross domestic product expanded by 3.2%, the Bureau of Economic Analysis said Friday in its initial read of the economy for that period. Economists polled by Dow Jones expected growth of 2.5%.”

“Exports rose 3.7% in the first quarter, while imports decreased by 3.7%. Economic growth also got a lift from strong investments in intellectual property products. Those investments expanded by 8.6%,” Imbert reports. “Disposable personal income increased by 3%, while prices increased by 1.3% when excluding food and energy. Overall prices climbed by 0.8% in the first quarter.”

“The report ‘helps offset fears of slowing global growth,’ said Alec Young, managing director of global market research at FTSE Russell. ‘At a time of lingering U.S.-Chinese trade uncertainty and weak economic data everywhere from Germany to Korea to Japan, strong U.S. data acts as an insurance policy against further global economic weakness. And with inflation still subdued, it’s too early to start worrying about Fed rate hikes again,'” Imbert reports.

Read more in the full article here.

MacDailyNews Take: Increased disposable personal income, especially in Q1, is always good news for companies who sell coveted goods and services like Apple Inc.


  1. This report merely adds to a confusing set of metrics.

    1Q19 had imports down, domestic production down … and somehow, inventories up. Now this report says that exports were up, which makes this all the more a self-contradiction.

    Historically, first quarters have been low, due to a factor known as “residual seasonality”.

    Looks like the suspicion may be correct that the FEDS tinkered with the underlying math, to minimize the reported value due to residual seasonality. What’s not clear is how this affects GDP reports outside of 1Q, such that we get a good YoY estimate…including one that’s comparable to past years.

    Because if not, then there’s a discontinuity in the definition of GDP such that we can no longer compare back.

    If it is the case that 1Q was tweaked for residual seasonality, and they don’t want to have a discontinuity, then IMO we should expect 2Q to be lower than we would otherwise expect it. Ditto potentially for 3Q to be trimmed some as well to basically “massage” the trendline to be smoother.

      1. Well TT, just trying to be absolutely objective, instead of the carnal temptations of partisanship.

        The facts are that this report only really makes sense if consumer spending fell off a cliff … but reportedly, that didn’t happen either. As such, through process of elimination, the only thing left is fudging of the adjustment for regional seasonality.

        The ramifications of this are that it means that this number literally can’t be compared to anything else yet.

        The reliably objective 2019 projections that I’ve seen from the likes of both Nancy Lazar and Ed Hyman are generally positive, but neither are predicting +4% GDP as was made in a political promise three years ago. Nancy’s the more bullish and she’s saying only +2.8% GDP for 2019.

        Time will tell if they’re right, but the question of the health of the economy invariably comes back to the basics of market fundamentals. Currently, wage growth looks good at first impression, but only without the context of real wage growth, which means when adjusted for inflation: for real wage growth, its down notably from its most recent peak, which was back in 2015.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.