U.S. GDP Q1 growth of 3.2 percent beats expectations; best first quarter since 2015.

Despite some gloomy forecasts (we reported them here and here), the U.S. economy posted strong growth in the first quarter of 2019. The Bureau of Economic Analysis released its advance estimate today, showing 3.2 percent annualized growth.

Real gross domestic product (GDP) increased at an annual rate of 3.2 percent in the first quarter of 2019 (table 1), according to the “advance” estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2018, real GDP increased 2.2 percent.

Along with the usual caveat.

The Bureau’s first-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see “Source Data for the Advance Estimate” on page 2). The “second” estimate for the first quarter, based on more complete data, will be released on May 30, 2019.

So, possibly 3.2 percent is off. Most likely, it will be. That’s how early estimates work. Still, the BEA graph shows it’s been a good run.

The Associated Press reports,

The advance in the gross domestic product, the broadest measure of economic health, marks an acceleration from a 2.2% gain in the previous October-December period, the Commerce Department reported Friday. However, about half the gain reflected two factors not expected to last — a big jump stockpiling by businesses and a sharp contraction in the trade deficit…

Still, economists believe the current April-June quarter will not match the first quarter’s performance. Many are looking for GDP growth to slow to around 2% in the current quarter.

We remain concerned about the coming 18 months, as we are about the sustainability of the budget lawmakers are likely to adopt this weekend. The rear view mirror has its role in navigation, but the view through the windshield is critical. And economists see recession risks ahead.