- Final 4Q GDP Price Index rose 3.5% versus estimates of a 3.3% increase and a prior estimate of a 3.3% increase.
- Final 4Q Personal Consumption rose .9% versus estimates of a 1.2% increase and a prior estimate of a 1.2% gain.
- Initial Jobless Claims for last week fell to 302K versus estimates of 305K and 312K the prior week.
- Continuing Claims rose to 2483K versus estimates of 2475K and 2463K prior.
BOTTOM LINE: The US economy grew at an annual rate of 1.7% last quarter, Bloomberg reported. Corporate earnings adjusted for the value of inventories and depreciation of capital expenditures rose 14.4% to an annual rate of $1.48 trillion. The core pce index, the Fed’s favorite inflation measure, rose 2.4% last quarter. Spending on commercial construction as well as equipment and software grew at an annual pace of 4.5% last quarter versus an 8.5% rise in the 3rd quarter. Inventory rebuilding added 1.89 percentage points to economic growth last quarter as companies gained confidence in the durability of the current expansion. Residential construction rose 2.8% last quarter versus a 7.3% gain the prior quarter. I expect GDP growth to come in a brisk 4-4.5% this quarter, which should be the peak for the year. Growth should slow to average levels through year-end. Long-term interest rates should also peak for the year around the time of the 1Q GDP release.
First-time claims for US jobless benefits unexpectedly fell last week as a buoyant labor market gave consumers the income to keep spending, Bloomberg said. The four-week moving-average fell to 310,750 from 312,250 the prior week. Solid job growth and rising incomes are boosting consumer confidence, which surged in March to the best level in almost 4 years. I continue to believe the labor market will remain relatively healthy over the intermediate-term without generating substantial unit labor costs increases.
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