GDP data from the BEA, chart by Mish. 

Gross Domestic Product, First Quarter 2023

Please consider the Advance Estimate of Gross Domestic Product, First Quarter 2023.

2023 Q1 Numbers Seasonally Adjusted Annualized Rate

• Real GDP rose 1.1 percentage points (PP).
• Real Final Sales (RFS) were up 3.4 percent. RFS is the bottom line number. The rest is inventory adjustment which nets to zero over time.
• Inventory adjustments subtracted 2.3 PP from GDP.
• Real Final Sales to Private Domestic Purchasers rose 2.9 percent. Government spending contributed 0.5 PP to the RFS total.
• Personal Consumption Expenditures (PCE) rose3.7 percent. 
• The PCE price index rose 4.1 percent.
• Gross Private Domestic Investment fell a 12.5 percent.
• Residential Investment fell 4.2 percent.
• Durable Goods spending rose 16.9 percent.

Consumers Strong, Business and Housing Weak

Assuming the numbers are not heavily revised, consumer spending was strong with weakness in business and housing slowdown. 

The strength in consumer spending was primarily in January but tighter bank lending and another Fed rate hike will add further economic pressures. 

Gross Domestic Income 

The BEA will not report Gross Domestic Income (GDI) until the third revision of 2023 Q1. That's months away.

GDP and GDI are two measures of the same thing. GDI was a disaster in 2022 Q4.

Also, the GDP revisions in the fourth quarter of 2022 were quite amazing. Thus, I am skeptical of these numbers but if they hold. Then the earliest we can see recession is February. 

GDPNow Forecast for 2023 Q1 Dives to 1.1 Percent

Congrats to Atlanta Fed's Pat Higgins whose GDPNow forecast was 1.1 percent, smack on the nose. In contrast, the Bloomberg Econoday consensus was 2.0 percent.

For discussion, please see GDPNow Forecast for 2023 Q1 Dives to 1.1 Percent, the BEA Reports Thursday

Yesterday, I commented 

GDI is delayed for many months so we will not know its take for a while. It is signaling recession or verge of recession. GDP isn't.

If GDP is revised to match GDI, and GDI is weak in 2023 Q1, a recession has begun. This is not all that unlikely, but nor is it certain.

Heading into recessions, revisions are heavily negative as the above chart shows. Heading out of recessions, revisions tend to be heavily positive.

The NBER, the official arbiter of recessions, averages GDP and GDI. But the NBER is usually so late that the point is moot. By the time the NBER announces, most of the revisions are already in. 

M2 Money Supply Declines 8 Straight Months, ODL Down 12 Straight Months

Meanwhile, please note M2 Money Supply Declines 8 Straight Months, ODL Down 12 Straight Months

Money supply is declining at the sharpest pace since the Great Depression.

Businesses have responded, consumers will, assuming they haven't already with revisions pending.

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