The US economy remains a global bright spot, even after an icy first quarter raised concerns about growth.
The official US GDP data is due on April 29. It’ll be bad, but there’s no reason to freak. After all, the US also had a frosty first three months of 2014, and then things rebounded. Growth for the year came in at 2.4%, not sizzling, but not horrific by recent standards. There’s plenty of indication that we’ll see a similar pickup in growth after this year’s first quarter. Let’s examine the evidence.
Sales of existing homes, the vast majority of American housing purchases, surged to an 18-month high in March, as mortgage rates remained incredibly low and real incomes rose due to falling oil prices. (Likewise, auto sales have started to bounce back.)
And today, Mexico reported a sharp March rebound in exports of its manufactured goods, the vast majority of which flow to the hegemon north of the border. (It should be noted that Mexico’s overall trade surplus was a bit weaker than expected, but much of that is due to the oil price bust, as crude oil is one of the country’s top exports.)
Likewise, non-oil exports in Canada are expected to get a boost from the strength of the US economy, and the relative weakness of the Canadian dollar. Canadian consumer goods exports have already surged.
By triangulating all these data you get a pretty decent sense that the US economy continues to roll forward. So, when headlines about weak US first-quarter GDP data arrives later this week, your best bet would be to ignore it.