This morning’s report is the poster child for every report in which the headline is both void of content and a spin doctor’s dream. As you will see in the next set of charts, the details on this report are actually quite good and very much consistent with what we have been seeing over the past several years. Had it not come as the first GDP report in a new administration, it would have been recognized for what it is: more of the same.
Every article that I have seen so far is focusing on what is going on with headline GDP. But if they reported Core GDP, as I think they should, the story line would be much different.
For reasons we shall presently see, Core GDP was slightly higher in the first quarter, but there were huge and important changes in its composition. That’s where the stories are. “Stories” because we have the tale of what is going now and the tale of what might be going to happen next.
And, based on what I see so far, I don’t think this takes us closer to the Boom phase. But, that is based on the first version of the numbers, and that could change. For now, I think the expansion phase is still the best descriptor.