U.S. Outlook: Is weaker GDP consistent with the sentiment?
The weak growth in GDP for Q1 2014 was a bit of a surprise for many economists this week, including me.
For more on the latest economic developments to watch, see higlighhts of my weekly economic analysis below, followed by a link to the full U.S. Outlook report, delivered on May 2, 2014.Key observations:
- Weak construction spending report raises the odds that Q1 GDP could be revised lower.
- The largest component of GDP, personal consumption, grew at solid 3.0 percent annualized rate in Q1.
- U.S. consumers continued to spend despite the freezing winter weather in the first quarter.
- We expect continued momentum in consumer spending throughout 2014.
- Velocity of money in the economy has fallen to a record low, doing little to offset deflationary pressures or generate real economic growth.