U.S. Outlook: Positive outlook unshaken by dismal Q1 GDP

Scott Anderson
Posted by Scott Anderson
Chief Economist

Despite gloomy news headlines, the GDP report’s details were less concerning and actually made the case for stronger growth ahead.

Graph showing GDP growthFor more on the latest economic developments to watch, see higlights of my weekly economic analysis below, followed by a link to the full U.S. Outlook report, delivered on May 30, 2014.

Key observations:
  • A stronger pace of consumer spending in 2014 appears to be materializing.
  • Business inventories will add to GDP growth in coming quarters.
  • Robust consumer demand should support a revival in business spending and residential construction in the months ahead.
  • The decline in Q1 corporate profits was comparable to declines seen prior to the onset of a recession. Not a reason to panic.
  • The drop in Q1 corporate profits is not a valid recession signal, due to bonus depreciation expiration.
Click here to read my full report.


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