First quarter GDP is 3.2% but the underlying data is much weaker, consistent with weakening economy
(Jason Furman is an American economist and professor at Harvard University's Kennedy School of Government and a Senior Fellow at the Peterson Institute for International Economics.)
https://threadreaderapp.com/thread/1121757845643497472.html
At CEA our blog post always featured PDFP (what BEA calls “Final Sales to Private Domestic Purchasers”). Statistically this is a better predictor of future GDP prints. This quarter it was a weak 1.3%.
PDFP includes two components: consumption which was weak this quarter, slowing to 1.2%. And non-inventory investment which was also weak at 1.5%.
PDFP excludes the volatile components that happened to drive growth this quarter: inventories which added 0.7pp, net exports which added 0.5pp, and govt which added 0.4pp.
GDP is volatile so this is weak signal. But to the degree today’s data has any info it is that the underlying trend of consumption and investment is weakening. And no reason to believe we’ll get lucky again next quarter with inventories, NX, and govt.