The Week in Review: April 29, 2024
The Economy Slows, Inflation Remains a Problem
Gross Domestic Product (GDP) is the broadest measure of goods and services. The U.S. Bureau of Economic Analysis (BEA) reported that GDP slowed from Q4’s annual pace of 3.4% to 1.6% in Q1.
Per the U.S. BEA data, consumer spending eased but remained respectable while business outlays and residential construction accelerated. A jump in imports shaved one percentage point off GDP. Notably, it’s still too soon to say whether Q3 and Q4’s jump in GDP was just an anomaly.
One-off factors can sometimes add or detract from GDP. In Q1, they detracted, and the 1.6% rate came in below projections, according to Bloomberg News.
Meanwhile, inflation picked up, as a closely watched measure of underlying inflation rose at a greater-than-expected annualized pace of 3.7%— see graphic below.
Stagflation? That term has popped up several times over the last 30 years.
Yes, growth slowed, and inflation accelerated. But it’s only one quarter, and one quarterly data point doesn’t make a trend. Still, inflation is a problem, especially in the service sector, which is more resistant to Fed policy.
Few see a rate cut anytime soon.
Market Summary
Two for the Road
In the 14 quarters since the brief 2020 recession ended, U.S. GDP has soared by $8 trillion, or 40%. By contrast, in the 14 quarters after the 2009 recession ended, GDP rose by a relatively measly $2 trillion, or 14%. - Axios, April 14, 2024 In 2021
One in seven health dollars is now spent on diabetes treatment, amounting to $800 million every day. - The Atlantic, April 15, 2024
Please do not hesitate to contact me with any questions or concerns. I hope you have a wonderful week!
Bill Stordahl, CFP®
Managing Director
Stordahl Capital Management
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