May 30, 2019 GDP Revised a Little; Inflation Revised a Lot by Lester Murray

The better-than-expected 3.2% Q1 GDP growth rate made it through its first revision almost unscathed. The updated value of 3.1% was actually a shade better than the 3% market consensus. Perhaps of greater significance was the surprisingly large, downward revision to the Q1 Personal Consumption Expenditures Core Price Index. The initially reported quarter-over-quarter rate of 1.3% has now become just 1.0%. A new, monthly report for April is due out tomorrow, and its year-over-year rate is, according to market surveys, expected to remain unchanged at 1.6%.

Market reaction to this morning's reports has been muted.  Treasuries are largely unchanged with the Ten-Year holding steady around 2.26%. Three-month bills are also holding steady around 2.31%, giving that closely watched portion of the yield curve a negative slope of around 15 basis points.