Real Q1 GDP contracted by a greater than expected 6.1% vs forecasts of
-4.7% but the components were very mixed. Personal spending rose 2.2%,
greater than estimates of .9% but Inventories subtracted 2.8% off GDP,
falling by $103.7b and Govt spending took off an uncharacteristic .8%
from GDP. Trade added about 2% points. Taking out the huge impact that
the inventory drawdown had on GDP, Real Final Sales fell 3.4% after a
6.2% drop in Q4. Also, relative to expectations, the price deflator rose
2.9%, 1.1% more than expected, thus NOMINAL GDP was only .3% worse than
expectations. Residential construction fell by 38%, the biggest decline
in this down cycle and spending on equipment and software fell by 33.8%.
Core PCE rose 1.5%, .5% more than expected. Bottom line, the huge
inventory drawdown will be reversed to some extent to the upside, thus
helping economic activity and that’s why the market hasn’t responded
much to the weaker headline #.

Although the information contained herein has been obtained from sources
Miller Tabak + Co., LLC believes to be reliable, its accuracy and
completeness cannot be guaranteed. This report is for informational
purposes only and under no circumstances is it to be construed as an
offer to sell, or a solicitation to buy, any security. At various times
we may have positions in and effect transactions in securities referred
to herein. Any recommendation contained in this report may not be
appropriate for all investors. Trading options is not suitable for all
investors and involves risk of loss. Although the information contained
in the subject report (not including disclosures contained herein) has
been obtained from sources we believe to be reliable, the accuracy and
completeness of such information and the opinions expressed herein
cannot be guaranteed. An options disclosure document may be obtained
from Mr. Jay Stenberg, Miller Tabak + Co., LLC., 331 Madison Avenue, New
York, NY 10017. Additional information is available upon request.
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