Unexpectedly, First Quarter GDP Plunged Even Harder and Steeper Than First Estimated, With Country Losing 1.5% of Its Total Wealth

As many predicted: It would be revised downward.

First-quarter GDP declined at a 1.5% annual pace, worse than the 1.3% Dow Jones estimate and a write-down from the initially reported 1.4%.

The pullback in gross domestic product represented the worst quarter since the pandemic-scarred Q2 of 2020.

Initial jobless claims totaled 210,000, a decline of 8,000 from the previous week.

...

The pullback in GDP represented the worst quarter since the pandemic-scarred Q2 of 2020 in which the U.S. fell into a recession spurred by a government-imposed economic shutdown to battle Covid-19. GDP plummeted 31.2% in that quarter.

Economists largely expect the U.S. to rebound in the second quarter as some of the factors holding back growth early in the year subside. A surge in the omicron variant slowed activity, and the Russian attack on Ukraine aggravated supply chain issues that had contributed to a 40-year high in inflation.

CNBC's Rapid Update survey shows a median expectation of 3.3% growth in the second quarter; the Atlanta Fed's GDPNow tracker also points to a rebound, but at a more subdued 1.8% pace.

Uh-huh.

...

One factor helping to propel growth is a resilient consumer fighting through inflation that accelerated 8.3% from a year ago in April.

Okay, so consumer spending -- and pent-up demand from being locked up for two years -- is the only thing keeping us from going under.

How long is that going to last?

How's consumer confidence doing? Very, very badly.

The University of Michigan consumer sentiment for the US fell to 59.1 in May of 2022, the lowest since August of 2011, from 65.2 in April and below market forecasts of 64, as Americans remained concerned over the inflation. The current economic conditions index fell to 63.6, the lowest in 13 years while the expectations gauge sank to 56.2 from 62.5.

How long will people keep spending freely while expecting disaster in the short-term future? Not very long, I'd imagine.

We're going to need a Board of Economic Disinformation soon.

posted by Ace at 03:05 PM

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