Real gross domestic product rose at a 2.3 percent annualized rate in the first quarter, down from a 2.9 percent pace in the fourth quarter of 2017. However, growth over the past four quarters hit 2.9 percent, the fastest four-quarter gain since the second quarter of 2015.
The small-business-optimism index from the National Federation of Independent Business fell in March but the result extends a run of 16 consecutive months above 100, a very high level by historical comparison. A significant concern among small businesses is the declining quality of the available labor force, particularly in the context of an already tight labor market and robust plans for increased hiring in the near future.
The employment report was weaker than expected for March, adding just 103,000 new jobs for the month. However, there are a number of tensions among the details of the report and with other measures of the labor market. Certainly, the BLS report could be the first of a string of weaker reports on the labor market and the economy more broadly, but the preponderance of data still support a positive outlook.
Real GDP grew at a 2.9 percent pace in the fourth quarter as domestic demand surged. Most of the major components of GDP made positive contributions, and core consumer prices rose at a modest pace, however, corporate profits did show a decline.
The Consumer Confidence Survey from The Conference Board shows consumer attitudes pulled back slightly in March but remain at historically favorable levels overall, suggesting support for ongoing economic expansion.
Recent data show that steady growth of the U.S. economy continues. After a disappointing first quarter of the year, gross domestic product posted healthy increases in the second and third quarters, at 4.6 and 3.5 percent annual rates.
The Great Recession of 2008-2009 will be remembered for its severity—a cumulative decline of 4.2 percent in real GDP, the loss of 8.7 million jobs, and a harsh toll on the banking system with more than 400 bank failures from 2008 to 2011. The Great Recession should also be remembered for the massive increase in the federal budget deficit it spawned.
As Labor Day marked the unofficial end of summer 2014 with backyard barbecues or long days at the beach, long gone were thoughts of the harsh winter and decline in first-quarter GDP. As we had expected it would, the U.S. economy rebounded in the second quarter, proving the naysayers, pessimists, and doom and gloom types completely wrong. In addition, U.S. equity markets continued to move higher throughout the summer, with many benchmarks hitting record highs. Twenty-fourteen was certainly no year to “sell in May and go away.”
Fifty years ago, the world was a different place. In 1964, Dr. Martin Luther King, Jr. was awarded the Nobel Peace Prize, China detonated its first atomic bomb, Russian Premier Nikita Khruschev was deposed, and Nelson Mandela was sentenced to life in prison. In the U.S., Lyndon Johnson received the democratic nomination for President, the Warren Commission’s report on the assassination of President Kennedy was released, New York hosted the World’s Fair, Congress passed the Gulf of Tonkin Resolution, the Beatles appeared on The Ed Sullivan Show, and the S&P 500 hit a peak of 86.28 in November.