Big Red Car here back from a nice tour of Savannah. Today, the numbers came out for Q1-2019. Gross Domestic Product is up 3.2%!
[Special note to “you know who” — yes., the government fiscal year starts in October, so, yes, it would be Q2-2019 of the government year, but this is Q1-2019 of the CALENDAR YEAR 2019. The economic statistics are kept on a calendar year and it is not my fault or a conspiracy. OK?]
Folks were waiting for these numbers with baited breath because of the government shutdown of 35 days — 22 December 2018 until 25 January 2019. In addition, this impacted the first quarter, always the weakest quarter for economic activity.
This is a huge number, y’all.
So, there is big news. Allow me to summarize, if I may.
Q1-2019 Gross Domestic Product was UP 3.2% versus an expected level of 2%. Estimates were all over the place because of the uncertainty of the government shutdown. Some folks thought that the growth might be ZERO. Instead, it was the highest Q1 growth rate since 2015.
US exports were up 3.7% and imports were down 3.7%. So much for the impact of tariffs?
Disposable personal income was up by 3%.
Inflation was 0.8% — meaning incomes are up more than prices which is healthy. Federal Reserve target level is 2%.
It is also worth noting that on the China front, President Xi announced that China will increase intellectual property protection while halting arbitrary technology transfers — two of the key objectives of this administration’s trade negotiations with China. This is a clear signal from the Chinese that they intend to make a deal on trade because they are willing to concede these two critical issues before a final agreement.
The stock market — not driven by this report, but by earnings — continues toward new highs though I am personally a little skeptical as to how much more the bull has to run.
So, there you have it, dear reader, a bit of good news that all of us can cheer.
Have a great weekend.