Tag Archives: ECI

GDP/ECI

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Karim writes:

Most important info in the report is the benchmark revisions: The first year of the recession (Q4 2007-Q3 2008) was revised from -0.8% to -1.9%. This adds a full percentage point to the Fed’s output gap measure. Also, Q2 2009 negative print marks first time U.S. economy has had four consecutive quarters of negative growth since 1947.

Q4 2008 was revised from -6.4% to -5.5%; Q1 2009 from -5.4% to -6.3%

The weaker Q1 number (especially inventories) led to the Q2 inventory drag being less than expected (-0.8%) and hence Q2 being less negative than expected at -1%.

The other components of GDP were either in line or weaker than expected. All numbers below are annualized rate of change:

  • Private consumption: -1.2% vs 0.6%
  • Non-residential fixed investment: -8.9% vs -43.6%
  • Residential fixed-investment (housing): -29.3% vs -38.2%
  • Exports: -7% vs -29.9%
  • Govt: 5.6% vs -2.6%

ECI posts second lowest advance on record at 0.4% (after 0.3% prior quarter).


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Claims, ECI

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From Karim:

  • True to the past 5yrs pattern, claims seem to be reverting to trend after the first few weeks of January.

Right, good call!

  • IJC climbed from 306k to 375k; the trend before the January drop was around 340-350k; this number was for MLK holiday week, so an adjustment issue here as well; bottom line is I think trend is still around 350k.
  • Continuing claims rose from 2685k to 2716k.
  • ECI (both headline and wage component) up 0.8% q/q

Data below is for Dec, so was largely known in yday’s GDP number.

  • Personal income up 0.5%, with wage and salary component up 0.4%
  • Core PCE up 0.2% m/m (2.2% y/y)

Most meaningful data here was continuing claims (little to no hiring taking place) and ECI (wage gwth still tame).

And Fed still looking at this as an indication of ‘inflation expectations’.

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