GDP Early Take

Apr 26, 2019 - 10:32 AM EDT

The headline GDP number is getting a lot of attention, particularly that aimed at the average consumer or investor. Over the weekend, you will see various stories about the number not being as good as it seems. The key elements are inventory growth and a trade surplus reduction. These factors are not just "volatile" and unpredictable, but a possible result of specific policies. Business behavior has been affected by impending tariff increases. The Q1 effect of this was positive. Now we will see if the inventories anticipated needs accurately.

My sense is that the result is consistent with growth slowing to about 2 to 2.5%. That should be our base case. The implication is that a softening in economic indicators, as long as they are consistent with the base case, should not be a cause for alarm.

I'll update further in WTWA this weekend.

Jeff Miller provides Economic Analysis as well as Market Forecasts as one of the original contributing analysts at FATRADER. A quantitative modeling expert and former university professor who is the #1 Economics contributor at Seeking Alpha, Jeff is regarded as an expert on economics, market reaction to news events, and computer-based trading.