US: Q1 GDP to accelerate? – Rabobank

Rabobank analysts point out that today should see the first release of US GDP growth for 2019Q1, with recent data pointing at an acceleration in growth during the quarter, largely because growth had been dented earlier in the year by the government shutdown.

Key Quotes

“The overall picture, then, is one of slowing growth in underlying terms but still at a somewhat elevated pace compared growth around the turn of the year.”

“The Atlanta Fed’s GDPNow estimate of Q1 GDP growth (quarter-on-quarter, at an annualized rate) stood at 2.7% on April 25, which is the last update before today’s GDP report. The consensus forecast is 2.3%, somewhat lower that the Atlanta Fed’s estimate. However, we should keep in mind that the difference looks bigger in terms of the annualized growth rates used by the BEA (i.e. it is only 0.1%-points in QoQ terms).”

“Perhaps core PCE is the more interesting indicator to watch. The consensus is looking for quite a drop in this measure of underlying inflation (from 1.8% to 1.4%) and this is exactly the stuff that could keep the Fed on its new policy path – which is for no hikes (nor cuts) this year.”