Holy Mackerel -- This Economy Is On Fire -- Recession? What Recession? -- Consumer Expenditures And The Area Under The Cure -- June 29, 2023

Updates

Later, 12:58 p.m. CT: jobless claims, link here.Wow, it's hard to find this data sometimes. 

Later, 12: 53 p.m. CT:

• Link here.

Original Post

Link here. The last estimate from GDPNow (see down below) was a paltry 1.1 -- missing the actual by quite a bit.

A reader suggested to me yesterday that JPow will raise rates by 50 bp in July. I said JPow would either keep rates the same or raise only 25 bp. After this report, JPow will have to raise rates by 25 bp.

50 bp? Possibly.

The reader is right; I am wrong. So, we'll see in July.

The market is about to diverge:

• the Dow will head in one direction;
• NASDAQ in another direction;
• same overall direction, but where one will head ENE (30°), the other will have a NNE heading (60°).

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here.

All my posts are done quickly: there will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them. 

Again, all my posts are done quickly. There will be typographical and content errors in all my posts. If any of my posts are important to you, go to the source.

From the linked report:

The U.S. economy showed much stronger-than-expected growth in the first quarter than previously thought.

Gross domestic product increased at a 2% annualized pace for the January-through-March period, up from the previous estimate of 1.3% and ahead of the 1.4% Dow Jones consensus forecast.

This was the third and final estimate for Q1 GDP.

The growth rate was 2.6% in the fourth quarter.

The upward revision helps undercut widespread expectations that the U.S. is heading toward a recession.

According to a summary from the department’s Bureau of Economic Analysis, the change came in large part because both consumer expenditures and exports were stronger than previously thought.

Consumer spending, as gauged by personal consumption expenditures, rose 4.2%, the highest quarterly pace since the second quarter of 2021.

At the same time, exports rose 7.8% after falling 3.7% in the fourth quarter of 2022.

There also was some good news on the inflation front. Core PCE prices, which exclude food and energy, rose 4.9% in the period, a downward revision of 0.1 percentage point. The all-times price index increased 3.8%, unchanged from the last estimate.

The area under the curve:

My favorite chart:

 This was the last estimate that I captured from "GDPNow" for 1Q23:

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A Musical Interlude

Link here.