Hard Data? = NOT Very Good Q1 2017

Tough to predict, subject to revision, and  a growing debate over what data best captures economic activity.

GDP Report Shows U.S. Economy Off to Slow Start in 2017

By NELSON D. SCHWARTZ 28 April 2017

The Commerce Department on Friday provided its first statistical snapshot of the American economy in the first quarter, the gross domestic product estimate.

• The economy barely grew, expanding at an annual rate of only 0.7 percent.

• The growth was a sharp decline from the 2.1 percent annual rate recorded in the final quarter of last year. It was the weakest quarterly showing in three years.

• Consumption, the component reflecting individual spending, rose by only 0.3 percent, well below the 3.5 percent rate in the previous quarter.

 

. . . Most experts believe the economy is picking up speed now, with Wall Street looking for growth at an annual rate of 2.8 percent in the second quarter. But initial hopes have been repeatedly proven too rosy lately — just two months ago, economists predicted that first-quarter growth would be roughly 2 percent.

Today's estimate, which will be revised twice in the coming months as more information comes in, underscores a growing debate over what data best captures economic activity.

Indicators referred to as “soft data” — surveys of corporate investment plans as well as consumer and business sentiment — have all risen since President Trump’s victory in November. And just this week, the president’s blueprint for big tax cuts for business and individuals helped fuel a renewed rally on Wall Street.

But actual economic activity — retail sales, inventory accumulation, automobile purchases — has not caught up with rising expectations, at least not yet.

Read more > New York Times