The mystery behind the stockpiling of inventories that led to the GDP surprise

Automatic TRANSCRIPT

The big mystery in the GDP report where did the inventories come from. And I'm wondering I have the answer. I think I had the answer. But so here we got the report out this morning about here. We are the individual, right? So the end of the quarter was almost a month ago, the gross domestic product the broadest measure of the economy. How is the economy doing is this number? And so there was a lot of heat about the fact that Barack Obama was the first president in eons to not have any full year growth of three percent came close to couple of years, but it had some quarters better than that. But the full years of his term it office two thousand nine all the way through two thousand sixteen. Nope. No three percent growth. We used to think. Three percent growth was not regular. But it was it was common enough to where people would go. We haven't had. Are you kidding me? Nope. We haven't. So as a result. President Trump said we we're going to get the economy moving again. And so two thousand seventeen was his first year, but he came in you know, like January and what was the growth rate. I'm trying to look up my GDP here. So it becomes one of those where. Didn't make it into hundred seventeen two thousand eighteen. Oh, yeah. Absolutely. We're going to get three percent growth. Got two point nine. Two point nine. That's it. And so as a result everybody still waiting for that three percent growth come back in the question is why are we not getting three percent growth? Well, here we come out with. This report comes out the first look, it's a it's a best guess is thirty roughly the end of the first month after the end of a quarter. So here we are. And then they look at it again another month from now, and they'll look at it again for the third and final time in June just before the end of the second quarter. They will give our final final report on GDP for the first quarter. The first look at it was today, and it came in at three point two percent. Hey, it's above three and be it is way above what was being expected. I mean, it was it was expected to be to something. And instead we come in at three point two percent. So this is a very good number. And it surprised everybody. And that's why the story in Markelle watches the big mystery and the GDP where did the inventories come from? Well, I will tell you this. Our our imports fell. So we did not by as much stuff from overseas. That's good. Our exports. Were up nice and strong. They added a more than one full percentage point of the three point two is from net exports. Oh, consumer spending. And this is one you've heard this before you don't have to be an economist. But you and me we combined consumer spending drives two-thirds of the economic engine in this country two-thirds of the economic growth comes from you and me spending. Well, guess what? Consumer spending was lousy in the first quarter. It was only one point two percent that is down more than half from the previous quarter. So you've got a rise in exports huge. Decline in imports. And higher inventory. Is what drove this number up to three point two percent. So why is market watch asking the big mystery and the GDP report where did the inventories come from? The whole thing is way more than anybody expected way more. But the higher inventory is a simple one to answer. There were a lot of companies in this nation that were buying before. More tariffs went into

Coming up next