JPMorgan Econ FI-US 1Q GDP growth revised down to 1.3-108460323.pdf

NorthAmericaEconomicResearch30May2024JPMORGANwww.jpmorganmarkets.comEconomicandPolicyResearchMichaelSHanson(1-212)622-8603michael.s.hanson@jpmchase.comJPMorganChaseBankNAAsexpected,USgrowthinthefirstquarterturnedouttobeabitsofterthaninitiallyreportedbytheBEA:1QUSrealGDPgrowthwasreviseddownto1.3%q/qsaarfroma1.6%previously.Thatdownwardrevisionwasabitlessthanwewerelookingfor(althoughthereporteddataareonthecuspbetweena1.2%and1.3%annualizedgrowthrateforlastquarter)butin-linewithconsensus.Thebiggestcontributiontothedownwardrevisioncamefromconsumerspending,whichwasreviseddownto2.0%arfor1Qfrom2.5%initially.Nearlyallofthisdownwardrevisionwasduetogreaterweaknessingoodsspending,particularlydurablegoods.Elsewhereindomesticdemand,businessfixedinvestment,residentialinvestment,andgovernmentspendingeachcameinslightlyabovetheirinitialreleases,althoughwithinbusinessinvestmentupwardrevisionstostructuresandintellectualpropertycameattheexpenseofcapexgrowthbeingreviseddownclosetoflat(to0.3%arfrom2.1%previously).Onnet,growthinrealfinalsalestodomesticpurchaserswasrevisedlowerto2.5%from2.8%.Thedragsfrominventoriesandtradewerebothsomewhatgreaterthanintheinitialrelease;togethertheysubtractedabitmorethan1%-ptfromtheinitial1QGDPgrowthrelease.Ontheincomeside,thefirstlookatrealgrossdomesticincome(GDI),whichgivesanalternativemeasureofeconomicgrowth,wasatouchstrongerthanGDPat1.5%q/qsaar.Before-taxcorporateprofitsfell-0.6%in1Q(currentdollars,notannualized),followingthreestraightquartersofpositivegrowththathelpedliftcorporateprofits7.2%oya.Detailsrevealasurgeinfinancialfirms’profitsaswellasastrongerrest-of-worldcontribution;nominalcorporateprofitsfordomesticnonfinancialfirmsfell-4.7%(notannualized)in1Q—thefirstdeclineinayear.Turningtoprices,corePCEpricesroseastill-firm3.6%q/qsaarin1Q,albeitatenthlessthanoriginallyreported.AlsoreleasedthismorningwereadvancedataontradeandinventoriesforthemonthofApril.Theadvancegoodstradebalancewidenedappreciablyto$-99.4bnfromanupwardly-revised$-92.3bn.Exportsexpanded0.5%onthemonthwhileimportsrose3.1%.Meanwhile,wholesaleinventoriesadvanced0.2%inAprilwhileretailinventoriesjumped0.7%,althoughwithamodestdownwardrevisiontoMarch.Theseoutcomesweremixedrelativetoourexpectations,andbothsectorsarenotablyvolatile.GivenitisstillveryearlyinthequarterforGDPtracking,wewillhaveamuchbetterpictureofhow2QGDPisaddingupaftertomorrow’spersonalincomeandspendingreportforApril.Seepage6foranalystcertificationandimportantdisclosures.US:1QGDPgrowthreviseddownto1.3%2MichaelSHanson(1-212)622-8603michael.s.hanson@jpmchase.comJPMorganChaseBankNANorthAmericaEconomicResearchUS:1QGDPgrowthreviseddownto1.3%30May2024JPMORGAN15000160001700018000190002000021000220002300024000111315171921232012$bn,saarRealGDPSource:BEA,J.P.Morgan-10-50510201620172018201920202021202220232024%q/q,saarRealGDPandrealGDISource:BEA,J.P.MorganGDIGDP-505102021202220232024%ch,saarRealGDPandrealdomesticfinalsalesSource:BEA,J.P.MorganRealdomesticfinalsalesGDP3MichaelSHanson(1-212)622-8603michael.s.hanson@jpmchase.co