The Advance Estimate released by the BEA shows real GDP growing at annualized rate of 3.2 for the first quarter of 2019 (2019Q1) compared to 2.2% in the fourth quarter of 2018 (2018Q4). Personal consumption, inventory investment, fixed investment, exports, and state and local gov’t spending all made contributions to GDP while residential investment fell. Importantly, Imports (See calculation below), fell by 4.4% from the prior quarter.

GDP Calculation: GDP = Consumption + Investment + Gov’t Spending + (Exports – Imports)

Exports, on the other hand, grew by 3.7% with the majority of that gain represented by goods (rather than services). Combined, the quarter-over-quarter changes in Imports and Exports represent net positive developments. As I’ve mentioned many times before, we need to see Imports and Exports narrow to reduce the possibility of a significant dollar depreciation. Read more on that topic in What Recession? released in February 2019.

Also worth noting, Personal Disposable Income slowed to growth rate of 3.0% compared to 5.8% the past quarter. This represents the smallest gain in PDI since the second quarter of 2017.

I would call this report health but by no means a knock out. This report appears to be just average enough to avoid being the catalyst the markets need to find a direction – up or down.

The revised report will be made available May 30, 2019.