Economic Parameters Favorable for First Quarter of 2019

06/04/2019

The Department of Commerce announced that GDP growth during the first quarter of 2019 attained 3.1 percent compared to the last quarter of 2018 which posted a 2.2 percent increase.

The Personal-Consumption Expenditures Price Index rose 1.35 percent during the first quarter compared to the corresponding period in 2018. This was close to a projected 1.4. percent gain. The BCE price index excluding food and energy was revised downward to 1.62 percent. Obviously inflation at this time is low and below the two-percent target adopted by the Federal Reserve.

Acceptable growth figures for the first quarter are inconsistent with concern over trade conflicts reflected in a six-week decline in stock market averages and lower profits posted by companies. The effects of the 2017 tax concessions are no longer apparent with a 1.7 percent decline in company profit in the fourth quarter of 2018 compared to the previous quarter.

Investment in fixed assets and also software, R&D and equipment rose during the first quarter at an annualized 2.3 percent rate, lower than a 2.7 percent estimate.

Businesses will be faced with uncertainty through the remainder of 2019. The economic outlook is clouded by trade wars, a global downturn, possible disruptions in North American supply chains and reduced consumer spending as tariffs are passed on at the retail level.






















































































































































































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