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Q1 GDP Revised to 3.1%

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Plenty of new economic data hits the tape ahead of Thursday’s market open, and this during a time period of doubt and vague worry about the markets going forward — the Dow is down 5% since May 9th, for instance. But the good news is that, although some of this morning’s reads may be tempered, all of them can still be classified as “favorable.”

The first revision to Q1 GDP came out this morning, hitting a new number of 3.1% — down 10 basis points from the initial read of 3.2%, but still carrying a “3-handle,” and on expectations of a fall to 3.0%. This keeps a key economic read in better-than-expected territory, and in historically the weakest quarter of the year. When Q2 GDP comes out this summer, the trade crisis may knock this number down a few pegs. But as for now, we remain on pace for 3% growth in 2019.

Initial Jobless Claims remained within the historic low range of 200-225K, to 215K — exactly in-line with analysts’ expectations. This follows an even-better unrevised 211K from the previous week. Continuing Claims slid even further toward half-century lows, from 1.66 million the previous week to 1.657 million in this latest report. 

Thus, we see no change to the long-term narrative of an absolutely robust domestic labor market. The next non-farm payroll report is expected a week from tomorrow.

Advance Trade in Goods for April was also better than expected, posting a deficit of $72.1 billion. Analysts were looking for -$72.9 billion. March’s headline was better at -$71.4 billion, and these deficits are nobody’s idea of a good thing to have. But considering the friction global trade is currently enduring, a healthier number than expected can be directly translated into more “good news.”

Personal Consumption came in at 3.1%, down from the 3.2% estimated. This is still a strong showing overall, though core PCE dropped to 1.0% from an expected 1.3%. Something to watch here, going forward.