U.S. Outlook: Positive outlook unshaken by dismal Q1 GDP
Despite gloomy news headlines, the GDP report’s details were less concerning and actually made the case for stronger growth ahead.
- 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.