Another mixed, but not bad week for economic news.

The first of several estimates for first quarter 2012 GDP came out at +2.2%, which was slightly weaker than the +2.5% growth rate expected by consensus.  The composition of the report was not especially robust, as inventory buildup contributed more to the growth number than expected, as compared to final sales, and business fixed investments and government expenditures (mostly defense spending) declined.  However, consumer spending as a component of the report was solid and was much better than first thought, and residential investment increased dramatically.  What does this mean?  Not a lot yet.  These numbers are early estimates, and subject to revision, but, at the same time, demonstrate that the economy is still in fragile footing but just plugging along fast enough to avoid the +2% ‘stall speed.’  The 2.0-3.0% is a wide but anticipated range for GDP for most of 2012 and we seem to be right within that band. Read more