Today the Commerce Department and the Conference Board gave us the final two economic indicators of this week. The advanced quarterly GDP figure for the first quarter of 2013 came in at +2.5 percent, representing a decent acceleration from the 0.4 percent of the prior quarter.
The details of the GDP data show a private sector continues to grow at a reasonably moderate pace despite growth stunting tax burden increases and small federal spending reductions (any article that calls the federal spending “cuts” as deep simply has an agenda or is simply mimicking prior statements). Overall, investment private domestic investment grew +12.8 percent on a seasonally adjusted annual rate, while consumption came in at +3.2 percent.
In another bright spot of the Commerce Department’s report, aggregate spending by governments declined by 4.1 percent over the prior quarter. The decline in the cost of government indicates commitment to reducing the costs of the generally unproductive sector (not saying that certain expenditures don’t add value), which, although skewing figures in the short-term, points towards stronger long-term economic growth.
On the consumer sentiment side, April’s numbers were relatively positive at 76.4, an increase of 5.7 percent over the prior month. The increase puts the University of Michigan’s consumer sentiment index about where it stood at this time last year, and a few percentage points below fall of 2012.
In a review of the economic indicators released this week, the GDP and consumer sentiment figures generally fall in line with the view of a moderately growing economy, still floating around the acceleration/deceleration inflection points.
On the detail of the indicators, the housing market figures, which included existing home sales, the FHFA housing price index, and new home sales, came in mixed, with housing prices and new home sales coming in above target, while existing home sales came in below target.
The housing moderately upbeat housing figures were countered by a poor durable goods report, with new durable orders overall and new durable orders less transportation declining much more than what observers had expected.
The labor market figures, based upon the initial claims and continuing claims numbers, were positive, reversing a six week trend of labor market deterioration (as measured by the claims figures). Whether the good initial claims figures are indicative of the prior three year trend or statistical noise in the six week trend is still, of course, up for debate.
Overall, the economy appears to be operating on cruise control, with either an acceleration or deceleration inflection point likely on the short-term horizon.