The reading for Q1-2008 GDP is out, and it’s no real surprise that GDP managed to show a small gain of +0.6% on the advance and preliminary number. Bloomberg had noted a +0.5% Q1 GDP reading as the median expectation, and apparently the range of estimates was -0.8% up to +1.5%. Other sources had +0.6% as the consensus estimates.
With the deflator and adjusting for prices, the reading came in at +3.5%, down from +3.9% in Q4-2007 and up from +1.8% in Q1-2007.
Spending rose 1.0% in Q1, while Durable Goods were down 6.1%. Non-durable spending was -1.3% and services spending rose by 3.4%. Spending contributed +0.68% and we saw inventories up again. You don’t want to look at the housing figures.
As far as the prior quarter, Q4-2007 saw a +0.6% rise. many argued that this number was merely above the Zero mark because of inventory build-ups and because of some higher prices that were passed on internationally.
The numbers don’t actually describe the term recession because there are not yet two consecutive quarters of Negative GDP.
Warren Buffett has already said its a recession for the man in the street, and we’ll take his views over the National Bureau of Economic Research any day of the week. By the time they say we are in a recession, we may actually be coming out of it.
None dare call it conspiracy.
Jon C. Ogg
April 30, 2008