Last week’s GDP report caught headlines for the weak economic growth in Q1. But a less-discussed part of the report was the surge in corporate profits in the fourth quarter of 2016.
Where GDP goes, consumers follow.
Yesterday the Commerce Department reported that the U.S. economy grew at a 0.7% annualized rate in Q1, below estimates of 0.9%. There were some positive underlying trends within the report, but the market took this as a disappointment.
The bigger worry is that the GDP report and the University of Michigan’s Consumer Sentiment – which measures how people feel about the prospects of economic growth and their own budgets – track each other.
The real fed funds rate has sat below zero since the Financial Crisis. What does this mean for the U.S. economy?