US GDP: Strong Q1 numbers - ING

James Knightley, Chief International Economist at ING, notes that US GDP grew 2.3% in Q1 despite tough comparisons and a legacy of seasonal adjustment headwinds.

Key Quotes

“US GDP came in at 2.3% for 1Q18, close to our 2.4% forecast and a bit ahead of the 2% consensus. The details show consumer spending was soft, rising 1.1% with bad weather playing a part, but we also have to remember there was a tough comparison with 4Q17 given the post hurricane rebound in spending we saw back then. Government spending also slowed to 1.2% for similar reasons.”

“Investment was good, rising 7.3% with structures a big positive while inventory building contributed 0.43 percentage points to growth and net trade added an extra 0.2%. Given the equity market volatility in the quarter and worries about protectionism this is a pretty good outcome all in.”

“Outlook for Q2 and beyond

It is also important to remember Q1 is typically the worst quarter for US growth, despite seasonal adjustment. Over the past 30 years, growth in the second quarter of any given year has on average been 1.4% faster than in the first. So here’s to 3.7% growth in 2Q!!”