MA’s Ben Herzon was recently quoted in the article “American Mystery Story: Consumers Aren’t Spending Even In a Booming Job Market” by Craig Torres and Michelle Jamrisko for BloombergBusiness (excerpts shown below). Ben Herzon, a senior economist at Macroeconomic Advisers LLC, isn’t that worried yet. As usual, the data is quirky. First, he notes, “it was crazy cold in February.” Aside from stocking up on milk in the snowstorm, staying indoors was probably a more attractive option for most shoppers. Purchases at online retailers in February showed a 2.2 percent increase, the largest since March 2014. Click here for the article
Monthly GDP rose 0.5% in January, essentially reversing a 0.5% decline in December. A jump in nonfarm inventory investment accounted for a majority of the January increase, with net exports accounting for most of the rest. Domestic final sales were little changed in January, reflecting increases in PCE and capital goods nearly offset by decreases in construction and other domestic demand. The level of GDP in January was 1.2% above the fourth-quarter average at an annual rate. Our latest forecast of 1.7% GDP growth in the first quarter assumes growth of monthly GDP over February and March that averages 0.2% per month (not annualized). Click here for more information on MA’s Monthly GDP measure.