April 26, 2019

Huge: 1Q19 GDP’s First Reading Comes in At An Annualized 3.2 Percent

Filed under: Economy,MSM Biz/Other Bias,Taxes & Government — Tom @ 9:39 am

I only have one direct link to a lowball prediction (see below), but I’ve consistently heard and seen predictions of 1.5 – 2.0 percent for months.

The sources I CAN quote are these:

Well, the first reading for the first quarter came in at 3.2 percent, blowing away expectations (bolds are in the release):

Real gross domestic product (GDP) increased at an annual rate of 3.2 percent in the first quarter of 2019, according to the “advance” estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2018, real GDP increased 2.2 percent.

The Bureau’s first-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency. The “second” estimate for the first quarter, based on more complete data, will be released on May 30, 2019.

Real GDP: Percent change from preceding quarter

The increase in real GDP in the first quarter reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, exports, state and local government spending, and nonresidential fixed investment. Imports, which are a subtraction in the calculation of GDP, decreased. These contributions were partly offset by a decrease in residential investment.

The acceleration in real GDP growth in the first quarter reflected an upturn in state and local government spending, accelerations in private inventory investment and in exports, and a smaller decrease in residential investment. These movements were partly offset by decelerations in PCE and nonresidential fixed investment, and a downturn in federal government spending. Imports, which are a subtraction in the calculation of GDP, turned down.

Current dollar GDP increased 3.8 percent, or $197.6 billion, in the first quarter to a level of $21.06 trillion. In the fourth quarter, current-dollar GDP increased 4.1 percent, or $206.9 billion.

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. 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.

Personal Income

Current-dollar personal income increased $147.2 billion in the first quarter, compared with an increase of $229.0 billion in the fourth quarter. The deceleration reflected downturns in personal interest income, personal dividend income, and proprietors’ income that were partly offset by an acceleration in personal current transfer receipts.

Disposable personal income increased $116.0 billion, or 3.0 percent, in the first quarter, compared with an increase of $222.9 billion, or 5.8 percent, in the fourth quarter. Real disposable personal income increased 2.4 percent, compared with an increase of 4.3 percent.

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UPDATE: Martin Crutsinger at the Associated Press conceded that the news was good, but then tried to convince readers that the result is a one-off (bolds are mine) —

The U.S. economy grew at a solid 3.2% annual rate in the first three months of the year, a far better outcome than expected, overcoming a host of headwinds including global weakness, rising trade tensions and a partial government shutdown.

… However, about half the gain reflected two factors not expected to last — a big jump stockpiling by businesses and a sharp contraction in the trade deficit.

The “big jump in stockpiling” contributed 0.65 points to GDP. What’s remarkable is that this contribution follows a huge +2.33-point contribution in Q318 and a smaller +0.11-point contribution in Q418. What’s really happening is that businesses are confident that consumers will continue to spend, and are making sure they have those goods on their shelves or available for delivery.

Trade data contributed 1.03 points, but it doesn’t look like a one-off from here. Imports declined (contributing 0.45 points) and exports increased (+0.58 points). It’s reasonable to believe that President Trump’s aggressive fair-trade efforts are bearing fruit. If so, the positive contributions from trade will likely continue.

UPDATE 2: I should also remind readers that, as CNBC’s Rick Santelli notes in his reax video at CNBC, that first quarter is supposed to the “dog of the year.” During the Obama administration, there was incessant whining about “residual seasonality” which supposedly penalizes the first quarter every year.

We’re not hearing a word about that today from anywhere else, are we?

UPDATE 3: The economy has grown by 3.21 percent during the past four quarters.

Friday (Moderated) Open Thread (042619)

Filed under: Lucid Links — Tom @ 6:00 am

This open thread is meant for commenters to post on items which they believe need to be known. Rules are here.

Positivity: Hospital Stunned by 12-Year-Old Boy’s Miraculous Recovery After Hundreds Pray for Healing

Filed under: Positivity — Tom @ 5:55 am

From Grayson, Kentucky (HT Weasel Zippers):

Published April 24, 2019 at 12:20pm
Modified April 25, 2019 at 12:44pm

Faith in the midst of crisis is a beautiful thing, for it is often a crisis that truly tests our beliefs and teaches us about the undeniable power of prayer.

With the new faith-inspired film “Breakthrough” released this year, we are seeing powerful prayer from many different angles. Now the amazing community of Grayson, Kentucky, is being thanked for praying for a young man who collapsed during a little league practice.

William Burton, 12 years old, suffered a cardiac arrest on the field on April 9. He was taken to King’s Daughters Medical Center and soon was airlifted to Cincinnati Children’s Hospital Medical Center, Kentucky Today reported.

“It was chaos,” Grayson First Baptist Church pastor Josh Schmidt told Kentucky Today. “So much was happening, and he was in bad shape.”

Schmidt went on to say that William’s mom, Amy Burton, “began quoting scripture and singing.” The boy suffers from long QT syndrome and is prone to heart problems.

Kentucky Today has followed the story closely. The news outlet not only shared about the family’s strong prayers — including William’s prayer warrior grandmother Teri Huffine — but also reported that the community and beyond took to praying for him. He was even getting prayers from Zimbabwe!

“We know God is hearing the prayers of His people on behalf of William!” Derrick and Amy Burton wrote on Facebook April 10.

“We are humbled by the love and support all over the world!” his parents went on. “Our beautiful son is in a fight for his life … Our God is a Mighty Healer and he loves William more than any of us can ever imagine. We feel your prayers and thank you for your love and support for our boy and our family.”

Miracle after miracle took place in William’s body in the days leading up to Easter Sunday. The community even sent cards wishing him well. “It feels amazing that I have been loved like this my whole life,” William shared with Kentucky Today.

William was able to go home just in time for the holiday weekend. …

Go here for the rest of the story.