- Preliminary 1Q Personal Consumption rose 3.6% versus estimates of a 3.5% gain and a prior estimate of 3.3%.
- Initial Jobless Claims for last week fell to 323K versus estimates of 325K and 322K the prior week.
- Continuing Claims fell to 2574K versus estimates of 2582K and 2596K the prior week.
- The Help Wanted Index for April came in at 39 versus estimates of 40 and a reading of 39 in March.
BOTTOM LINE: The US economy expanded at a greater rate in the first quarter than the government originally expected. An improving trade deficit and strong consumer spending helped spur the increase. The 10-year average rate of US growth, which includes the “bubble years,” is 3.3%. Investment in housing accelerated. Residential housing construction rose at an 8.8% annual rate in the quarter, the best since mid-2004. The prior estimate was 5.7%, and it compares with 3.4% for the fourth quarter. The personal consumption expenditures prices index, the Fed’s favorite inflation measure, rose 2.1%, slower than the 2.7% in the fourth quarter. Corporate earnings adjusted for the value of inventories and depreciation of capital expenditures rose 4.5%, compared with a hurricane-distorted 13.5% in the fourth quarter of 2004.
The four-week moving average of jobless claims rose to 330,500 from 330,000. The four-week moving-average of continuing claims rose to 2.587M, from 2.582M, which was a four-year low. The insured unemployment rate, which tends to move with the US unemployment rate, held at 2%. I expect job growth to moderate over the coming months.