Economists React to First Quarter GDP Report: ‘Stronger Than It Appears’

The U.S. economy grew at the slowest pace in three years during the first quarter, rising at a 0.7% rate, down from the prior quarter’s 2.1% rate. Here are early reactions from economists and analysts: “Perhaps most encouraging, business investment in equipment, which had languished for two years, posted a 9.1% annualized advance (I had looked for a 6% rise). If the government can pull off corporate tax reform, I look for a torrent of investment projects to be unleashed. Until then, gains will be limited.” —Stephen Stanley, Amherst Pierpont Securities [wsj-responsive-sandbox id = "0" ] “Economy stronger than it appears in [first-quarter] report, already showing signs of accelerating again. Tailwind for wages encouraging.” —Diane Swonk, DS Economics “While consumers may have stood still in the first quarter, sluggishness in consumer spending did not translate to the housing market…Housing is Continue reading "Economists React to First Quarter GDP Report: ‘Stronger Than It Appears’"

Why First-Quarter Growth Is Often Weak

The U.S. economy is off to a slow start. Again. First-quarter gross domestic product is expected to expand at a 1% seasonally and inflation-adjusted annual rate. The figure would be a disappointment alongside strong job creation and soaring consumer optimism following the election of Donald Trump. A weak reading, however, wouldn’t be a surprise. Slow first quarters followed by rebounds have been common in recent years, generating short-term consternation but leaving the overall economic trajectory little changed. Since the latest recession ended, first-quarter growth has averaged a 1% pace. The remaining three quarters have averaged 2.5%, leaving the overall rate of growth at a familiar 2.1%. That means there is a good chance a poor first-quarter reading on GDP will be another head-fake. It also means it’s harder for policy makers and economists to decipher potential warning signs in the real-time GDP data. There are some pretty Continue reading "Why First-Quarter Growth Is Often Weak"

The Jenga Tower of Prosperity

The Jenga Tower of Prosperity: The Strong, Prosperous, And Resilient Communities Challenge (SPARCC) By John C. Williams, President and CEO, Federal Reserve Bank of San Francisco SPARCC National Launch Event, March 30, 2017       IntroductionGood afternoon.  You heard correctly, I’m indeed here representing the Federal Reserve Bank of San Francisco. Some of you… Read More The post The Jenga Tower of Prosperity appeared first on The Big Picture.