Rumors of a contraction to start the year were overblown. Since March, a string of positive economic headlines have helped soothe investor sentiment and maintain economic momentum. We are still in a growth cycle with room to run.

We have lingering concerns about the potential impacts of trade policy and international decisions that may undermine stability. Risks in this area escalated over this past weekend; negotiations were resuming as this issue goes to press.

Key Economic Indicators
USEO Chart May 2019

  • The initial estimate of real gross domestic product (GDP) for first quarter 2019 reflected a surprisingly strong 3.2% annualized growth rate. However, a review of the components of GDP revealed an unflattering mix of growth drivers.
    • Inventory accumulation is unlikely to continue as inventories will be drawn down.
    • Net exports provided a boost, but were driven by a reduction in imports due to a fall in domestic demand, rather than growth in exports.