The first peek at Gross Domestic Product (GDP) on Friday will likely show a moderation in activity vs Q1.
- Q1 posted a 3.1% annualized pace vs a forecast of 1.9% in Q2 (Econoday).
Yet, headline numbers can be misleading.
In Q1, soft consumer and business spending was offset by swelling business inventories and a surge in exports, which have been whipsawed by trade tensions.
Consumer spending rebounded in Q2, but exports have turned lower. Therefore, Q2’s headline may not reflect a firmer underlying economic tone.