The unrevised 3.1% U.S. Q1 GDP growth figure
The unrevised 3.1% U.S. Q1 GDP growth figure undershoot estimates thanks to a hefty downward revision in service consumption that more than offset the boosts from retail sales to leave a lean 0.9% (was 1.3%) Q1 growth pace. The intellectual property boost to a hefty 12.0% growth clip from 7.2% provided a partly offsetting upside surprise. Analysts otherwise saw the expected small downward inventory bump, boosts for both exports and imports that lowered net exports modestly, and hikes for nonresidential and public construction. Final sales growth in Q1 was lifted slightly to 2.6% from 2.5%. Analysts left our Q2 GDP estimate at 1.6%. The revised Q1 data still show a big $122.8 (was $125.5) B inventory accumulation rate that partly reflects tariff "front running" that is an intended pattern, and that leaves a production headwind for foreign rather than U.S. producers. Yet, the rise may also reflect the now larger Q1 consumption lull that implies a more problematic "unintended" rise for U.S. producers. The industrial production pull-back since January can be seen in the light of diminished restocking demand.