Markets Rise Despite GDP Miss

Markets are higher�have slipped broadly following this morning’s release of preliminary GDP estimates below expectations for Q1.

The Dow Industrials are up 20 points at 11,187, after a flat futures reading in pre-market trading, while the S&P 500 is up almost a point at 1,207 after futures dropped a point, pre-market.

The folks at RDQ Economics view this morning’s 3.2% annualized GDP increase as containing “no major surprises,” writing that final demand for goods and services just has not picked up, noting “the problem is a slow recovery pace of final sales, which has averaged only 1.6% since the second quarter of last year.”

The Conference Board issued a statement on GDP, stating that it “confirms that the U.S. economy continues to recover but the growth path ahead will remain bumpy.”

The “underlying dynamic” of the GDP report is actually “better balanced,” writes the Board, than the 5.6% rise in Q4, with “More of the rise in GDP came from domestic demand and less from an inventory correction.” However, the downturn in residential spending is concerning, and unless employment picks up, consumer spending will cool.