During the first three months of the year, the US economy grew by an annualized 2.2% Q/Q, down from 3.0% Q/Q in the final three months of 2011 and below the consensus estimate of 2.5% Q/Q. The breakdown shows that both personal consumption (2.9% Q/Q from 2.1% Q/Q) and also residential investment (19.1% Q/Q from 11.6% Q/Q) picked further up at the start of 2012.
Net exports stayed broadly unchanged in the first quarter after posting a slight drag to GDP in Q4. There was a smaller positive contribution from change in inventories than in the final months of 2011, while non-residential investments (-2.1% Q/Q from 5.2% Q/Q) and government consumption (-3.0% Q/Q from -4.2% Q/Q) weakened in the first quarter. Overall, the outcome is slightlyweaker than expected, but the main drag came from government consumption, which dragged 0.6% Q/Q off growth. Also non-residential consumption is slightly disappointing, while personal consumption was somewhat stronger.
As was already the case in the previous two months, the final figure of Michigan consumer confidence showed again an upward revision. April University of Michigan consumer confidence was revised to 76.4 from a first estimate of 75.7 and a reading of 76.2 in March. Consumer confidence is now nearing last year’s high of 77.5. The details show that the upward revision was entirely based in the economic conditions sub-index (82.9 from 80.6), while the outlook sub-index was marginally downwardly revised from 72.5 to 72.3. Consumer confidence remains strong, nearing the recent highs, but in a longer term perspective, consumer confidence remains sharply below the average of 85.5.