US OUTLOOK/OPINION: Macro Since March FOMC - Growth: Firmer Details Behind
Q1
Miss

(The below is an excerpt from the full MNI Fed Preview - full note here:
https://roar-assets-auto.rbl.ms/files/61350/FedPrevMay2024.pdf)

* Real GDP was softer than expected in advance Q1 data at 1.6% (cons 2.5) after
3.4% in Q4.
* Consumer spending growth was also softer than expected at 2.5% (cons 3.0) but

  beyond that the downside surprises were from a larger than expected drag from
  net exports, courtesy of stronger imports, and changes in inventories.

* The upshot is that final domestic demand still provided a solid contribution
to real GDP growth of 2.8pps after two quarters averaging 3.6pps.
* Combined with a rebound in import strength, it's another quarter that doesn't

  look even close to being recessionary and, as above, it's come with a
  surprise uplift in core inflation.

* Within the details, consumption has seen unusual divergence. Goods

  consumption is indicated particularly weak in Q1 at -0.4% considering the
  strength in the retail sales control group (the latest two monthly reports
  having helped push out Fed rate cut expectations), but services consumption
  accelerated to its strongest quarter since 3Q21 at +4.0%. That could further
  offer further concerns about the persistence of service price inflation in

the months ahead.