The preliminary figure for Q1-2010 GDP this morning from the Commerce Department came out at +3.2%. While this is hot as it is above the 3.0% mark, this is south of the 3.3% estimate from Dow Jones. The PCE Price Index also came out as +1.5%, which shouldn’t send the worriers running into the streets that things are getting out of hand.
Earlier this week, the FOMC decided to keep interest rates steady at the target 0.00% to 0.25%. While this is too low for a normalizing environment, this sort of GDP figure along with a low inflation and still very high unemployment will all allow the FOMC to keep its “extended period” stance for now.
Consumer spending was 3.6%; Real final sales, GDP minus inventories, rose by +1.6%. Residential fixed investment fell by what was about 10%. Business spending rose 4.1%. Imports rose 8.9%, while exports rose by 5.8%.
JON C. OGG
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