A Mixed Message - March 13, 2019
U.S. economic growth has moderated from Q2’s 4.4% annualized pace to 2.6% in the final quarter of 2018 (U.S. BEA).
While quirks in the data gathering process may be impacting some reports, various economic releases suggest growth has continued to slow in Q1.
- Nonfarm payrolls grew by just 20,000 in February (U.S. BLS).
- But the jobless rate fell to 3.8% from 4.0%.
We’re seeing weakness in the global economy, especially in Europe and China.
- Lackluster growth overseas can hamper U.S. exports and impact profits of U.S. multinationals.
Analysts project Q1 profits at S&P 5001 companies that conduct more than half their business at home to rise by 1.0% in Q1 (FactSet a/o March 8).
Analysts project Q1 profits at S&P companies that conduct more than half their business overseas to fall by 11.2% in Q1.
What’s happening in the global economy is impacting bottom line results.
- It’s generating unease among investors.
However, overseas troubles are being balanced by—
- Continued economic growth at home,
- A Federal Reserve that hit the pause button on rates, and
- Signs that trade tensions are easing.