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Comment from Xiao Cui, Senior Economist, at Pictet Wealth Management
Real GDP in Q1 came in below all forecasts on BBG, slowing to 1.6% QoQ annualized (vs. consensus of 2.5%) from 3.4% in Q4. However, stripping out the volatile trade and inventories, domestic final sales, a better gauge of final demand, grew at a robust rate of 2.8%, slowing only marginally from 3.5% in Q4.
Relative to expectations, part of the downside surprise was driven by net exports, which subtracted a hefty 0.9% from headline growth. The drag was due to slowing exports and strong imports, itself an indication of solid domestic demand. Consumption growth also came in a touch weaker than expectation, slowing to 2.5% (consensus: 3.0%) from 3.3%. However, all the slowdown...
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