The Morning View: April 26, 2019

  • April 29, 2019

BY: MARSHALL BARTLETT
Senior Vice President / Portfolio Manager

In this morning’s announcement, the first reading on U.S. GDP growth for the first quarter 2019 shows an increase of 3.2% at annual rate, well above forecasts. Increases in business inventories and exports drove the strength; personal consumption expenditures were a bit weak. The core PCE rate, another measure of inflation, grew 1.3% in the quarter, slightly lower than expected. While growth over 3% with limited inflation appears positive, inventory expansion is not likely to recur in subsequent periods. In addition, subdued personal consumption is a challenge, given consumer spending comprises close to 70% of the GDP calculation. While equity futures and bond yields initially moved higher immediately following the report release, equity futures are now mixed and yields are lower as we move closer to the market open.

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