LOL, JK. We got the initial read on first quarter GDP this week – while economists were forecasting a 2.3% growth rate, we actually saw GDP increase by 3.2% for the first quarter. What happened to all the data that was indicative of a slowdown in economic growth?! A surprise to the upside came from a 3.9% increase in local and state government spending, which had decreased by 1.3% in the fourth quarter. Two other factors that positively impacted GDP were increased inventories and trade. On the other hand, consumer spending only increased by 1.2%, which is the slowest rate of growth we’ve seen in a year, business fixed investment decelerated…

The March Continues into April The Philly Fed’s manufacturing index came in at 8.5 in April, falling from its March reading of 13.7 and coming in below economists’ expectations. This index was as high as 32.3 at the beginning of last year and has steadily marched downward. More notably, the future activity outlook fell to its lowest level since February 2016 (all this doesn’t make me feel too warm and fuzzy). Manufacturing has been a weakness in the economy lately driven by a stronger US dollar, weaker growth overseas (though Chinese economic data for first quarter came in ahead of expectations with an 8.5% jump in industrial production), and trade…

Minutes Matter Remember the Fed meeting two weeks ago when they decided to keep interest rates unchanged and effectively hit pause on their tightening policies? We got to see the minutes from that meeting this week and their decision was driven by economic data indicating slower growth in the US, Brexit (the “will they, won’t they” drama continued this week with yet another extension), and of course can’t forget trade tensions with China. To my surprise, the FOMC also called out the lack of inflation in response to wage growth and pricing pressure from tariffs. While policy changes were indicative of a cautious stance toward the economy, some FOMC members refused to rule…

Everyone’s Favorite Blame Game Manufacturing activity rebounded in March, with the ISM manufacturing index coming in at 55.3, ahead of the 54.2 print in February and economist estimates of 54.5. If you remember the Philly Fed Survey from a few weeks ago, it wasn’t clear what to expect from this report but most of the data pointed to stabilization of the manufacturing sector that’s been weakening since the fall last year. Components of the index were encouraging – new orders increased 1.9 points, production increased 1 point, and employment actually showed significant strength rising 5.2 points. The ISM services index, however, expanded at the slowest rate in 19 months, falling to 56.1 from 59.7…