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International
US Q1 GDP, Personal Consumption Growth Revised Lower in Second Estimate
US economic growth, as measured by gross domestic product, rose by 1.6% in Q1, revised lower from a 2.0% increase in the advance estimate.There was no revision expected in a survey compiled by Bloomberg as of 7:00 am ET.GDP rose by 0.5% in Q4.Personal consumer expenditures rose by 1.4% after a 1.9% gain in Q4, a downward revision from a 1.6% gain in the advance estimate.There were also negative adjustments to nonresidential fixed investment and inventories that were partially offset by upward revisions to residential fixed investment and net exports. Government spending growth was unrevised.The GDP price index rose by 3.5%, revised down from a 3.6% gain in the advance reading, with the overall PCE price reading unrevised at a 4.5% gain and core PCE price reading revised up slightly to a 4.4% increase from 4.3% in the advance estimate.The third estimate of Q1 GDP is scheduled to be released on June 25.The quarterly measure of gross domestic product, or GDP, is released by the US Bureau of Economic Analysis at three stages, with the advance reading about a month after the end of a quarter, followed by second and third readings for the same quarter two and three months after quarter-end.The data are broken down by each of the GDP components: consumption, fixed investment (which includes residential and nonresidential investment and inventories), government spending, and net exports (exports minus imports). The report also includes prices measures for the overall reading and the categories.Strong GDP growth is a positive for stocks, but a negative for bonds, especially if it is accompanied by sharp inflation gains.
International
April US Durable Goods New Orders Post Much Larger-Than-Expected Rise
New orders for US durable goods rose by 7.9% in April following a smaller increase of 1.3% in March, well above the expectations for a 4.0% increase in a survey compiled by Bloomberg.Excluding a 21.5% increase in transportation orders, new orders would have been up 1.1% in April after a 1.1% increase in March. Expectations were for a 0.5% gain.Durable goods shipments rose by 0.5% after a 0.8% increase in March. Excluding transportation, shipments were still up 0.5% after a 0.8% increase in the previous month.Nondefense capital goods orders excluding aircraft fell by 1.1% in the month, while shipments increased by 0.4%.
International
April US Personal Income Flat, Spending Growth Slows, Annual Price Growth Accelerates
Personal income held steady in April following March's 0.5% gain, below an expected 0.4% gain in a survey conducted by Bloomberg.Personal consumption expenditures were up 0.5%, as expected after 1.0% gain in March. After adjustment for inflation, real PCE rose by 0.1% after a 0.3% increase in March, as expected.The PCE price index rose by 0.4%, below the 0.5% gain expected, lifting the year-over-year rate to 3.8% from 3.5%. The price index rose by 0.7% month-over-month in March.The core PCE price index increased by 0.2%, below the 0.3% gain expected and following a 0.3% gain in March. The year-over-year rate accelerated modestly to 3.3% from 3.2% in the previous month.The monthly report on personal income and spending is released by the Bureau of Economic Analysis about one month after the period it is measuring. Personal income is broken down into various categories, with wages making up the largest portion. Spending is reported in two ways-before and after adjustment for inflation movements.The price measures in the report are closely watched by the Federal Reserve, particularly the year-over-year. Faster consumption growth is usually a positive for stocks but combined with soft income readings could suggest consumers are overextending. Bonds are sensitive to the price measures if the pace is above the Federal Reserve's 2% target.