• National GDP Declines, Jobless Claims Drop, Manufacturing Growth Slows

    National GDP Declines

    National gross domestic product, a key measure of the U.S. economy’s overall health, declined 0.4% in the first quarter and was down 1.4% from a year earlier, the Commerce Department reported.

    Though GDP posted its first quarterly decline on an annualized basis since the early days of the pandemic two years ago, personal spending remains a saving grace. Consumer spending for the first quarter was up 1.8% from a year earlier, despite signs that lingering supply chain disruptions are weighing down the overall economy.

    “The decrease in real GDP reflected decreases in private inventory investment, exports, federal government spending and state and local government spending,” according to a Commerce Department statement. The U.S. continues to import more than it exports, which also detracts from GDP.

    In addition to consumer spending, property investment also showed increases in the latest quarter. The category known as “nonresidential fixed investment,” which includes new construction, improvements to existing buildings, property acquisitions and brokers’ commissions, rose approximately 1.2% in the past year.

    The corresponding residential investment category, which covers single-family and multifamily real estate, inched up 0.1% over the past year.

    Jobless Claims Drop

    Initial claims for unemployment compensation declined in the past week as a tight labor market leaves employers in several industries struggling to find qualified workers.

    There were 180,000 initial claims nationwide for the week ended April 23, down 5,000 from the prior week, the Labor Department reported Thursday. The trailing four-week moving average stood at 179,750 claims, up 2,250 from the prior week’s moving average.

    Labor Department officials also reported that the seasonally adjusted insured unemployment rate was 1% for the week ended April 16, unchanged from the prior week and representing 1.4 million people. “This is the lowest level for insured unemployment since February 7, 1970, when it was 1,397,000,” a Labor Department statement said.

    For continuing claims in all state and federal unemployment programs, which are reported on a more delayed basis, there were a total of about 1.5 million claims for the week of April 9, a decline of 105,322 from the previous week.

    Those claims were down sharply from the approximately 16.5 million seen in the comparable week of April 2021.

    Manufacturing Growth Slows

    Factories are still racing to keep up with rebounding consumer demand across the central United States, though the rate of manufacturing growth slowed during the past month, according to a survey from the Federal Reserve Bank of Kansas City.

    The Fed bank serving Kansas, Colorado, Nebraska and four other states uses survey responses from company executives to compile monthly manufacturing activity indexes. The bank tracks changes in metrics such as production, new orders, employment, supplier delivery times and raw materials inventories.

    Its monthly composite index for April was 25, compared to 37 in March and 29 in February. Numbers reflected a heightened production pace for furniture, computers and electronics, while growth slowed for categories such as transportation equipment, appliances and food.

    “The pace of regional factory growth eased somewhat but remained strong,” Chad Wilkerson, vice president and economist at the Kansas City Fed, said in a statement.

    “Firms continued to report issues with higher input prices, increased supply chain disruptions and labor shortages,” he said. “However, firms were optimistic about future activity and reported little impact from higher interest rates.”

    Source: www.CoStar.com