U.S. Department of Commerce

That's interesting. Just now, according to the first quarter report from the U.S. Department of Commerce


There seems to be concern that the U.S. GDP growth rate of 1Q is lower than expected, so there is a concern that it may be going to stagflation

It announced that this 1Q grew 1.6% at an annual rate, compared to 3.4% at an annual rate of 4Q

In contrast, consumer spending increased by 2.5% at an annual rate (4Q increased by 3.3%)

But when you look at these numbers, you have to be aware that GDP growth is real growth, and consumer spending growth is nominal growth
To correct the difference between the two, we need to substitute the inflation rate

PCE up 3.4% on an annualized basis in Q1 (last 4Q was 1.8%)
Nominal growth rate = real growth rate + inflation rate
If you add inflation to the real growth rate, it becomes a nominal growth rate

Therefore
The nominal growth rate is
This 1Q is 5.0% and the last 4Q is 5.2% similar

If I were to think about it more elaborately
When calculating the nominal growth rate from the real growth rate, we should not add PCE, but add the GDP deflator
(GDP deflator for this 1Q was 3.1% at an annualized rate
3.4% per annum for PCE and 3.5% per annum for CPI)
In fact, there are many types of price indicators
CPI, PCE, GDP Deflator, core CPI, core PCE...
Recently, a super core PCE came out
(In fact, the price index felt by each individual is different for each individual.
Each individual's basket of consumption is different...)

The article says that the net export deficit suddenly increases significantly as to why 1Q GDP growth suddenly dropped...

More than that
1) As prices rise, and as a result of high-interest policies, I wonder if U.S. consumption is finally decreasing
2) In addition, since the first quarter's GDP figure is preliminary, there is room for GDP growth to rise further when the correction is released next month
In particular, there has been a lot of room for correction in the first quarter's GDP figures
(For 23 years 1Q, the preliminary figure increased by 1.1%, but the final figure was corrected to 2.2%.)


1. The economic growth rate (Real, SA, QoQ, and Annual Rate) is 1.6 percent. The market forecast was 2.4 percent. It is bewildering. Is it possible for GDP almost two months after the deadline to deviate so much from predictions?

2. Looking at the contribution to growth, service consumption is very solid, and goods consumption has decreased. Net exports are, of course, negative. Inventory has fallen significantly for more than two quarters (reduction in inventory is included in investment reduction in macro). There is a mix of signs, but I don't think it's bad in general.

3. In the first quarter, the personal consumption expenditure price index growth (Core, SA, QoQ, and Annual Rate) was 3.7%, exceeding the market forecast of 3.4%. Since the January and February growth rates have already been announced, this means that inflation in March (to be announced on Friday) will exceed market forecasts.

In summary, the growth rate was significantly lower than the market forecast and inflation was high. Both stock and bond prices fell significantly as the economy is struggling and the prospects for a rate cut are not bright.

Based on my recent YouTube browsing, I'd like to make a prediction,

1. Perhaps someone would say something as strong as "stagflation coming" or "hard landing visualization." I'm not that bad, but I think that's how it can be interpreted.

2. In addition, there will be many people who regret saying, "I knew everything."

3. The stock channel will say, "Now is the time to sweep U.S. stocks into low prices," while the bond channel, which said a rate cut would open a big market for bonds, will point to "reverse ideas, why bonds are surprisingly attractive."