Below is a chart and brief excerpt from today's Early Look written by Director of Research Daryl Jones.
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A significant recent driver in our GDP nowcast model was Real Disposable Income, which fell by almost -10% Y/Y! This was good for a greater than 3 standard deviation move in that data set. As a result, our Q1 2022 GDP growth number is now at +0.68%. This deceleration will get sharper as we head into Q2. They key reason for this is highlighted in the Chart of the Day and relates to the extremely challenging stimulus comparisons. This stimulus obviously drove up household income in Q1 and Q2 of 2021 and then subsequent consumer spending into Q2 and Q3. (Editorial note: consumer spending is some 70% of U.S. GDP!) |
