US GDP and Other Data, Getting Ready for the Numbers for Europe

Yesterday was rich in all sorts of macroeconomic statistics. The key data, of course, were the US GDP growth rates in the first quarter of 2021. Recall that the current consensus in the markets is the expectation of a quick recovery in the world's largest economy.

In this context, the data did not disappoint. The 6.4% growth was the second largest since the second quarter of 2003, and was only surpassed by the growth in the third quarter of 2020 (but there was an ultra-low base effect after the 31.4% drop in US GDP in the second quarter of 2020).

However, let us introduce some skepticism into the data, noting their steroid nature. This refers to the fact that consumers, who account for 68.2% of the US economy, increased spending by 10.7% for the quarter, compared with a 2.3% increase in the previous period. That is, the lion's share of the record is caused by checks for $1400, which the government handed out to the right and left and on which consumers bought goods. But this was a one-time action. So far, no one plans to distribute new checks. So, you shouldn't take the data for a very clean coin.

This idea was somewhat confirmed by the data on jobless claims. The number of applications for unemployment benefits, both primary and secondary, remained virtually unchanged over the week. That somehow does not fit well with the concept of record economic growth.

Today, the Eurozone and its key economy, Germany, are reporting on the GDP growth rates for the first quarter. Considering that the beginning of the year passed under the sign of a pandemic and lockdowns in Europe, it is hardly worth expecting a super positive.