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Economic Commentary

Pandemic related distortions remain

May 02, 2022
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Since the pandemic began, economic data have been distorted, and that continued last week. Gross domestic product (GDP) fell for the first time since the Covid recession in 2020, but underlying spending continued to advance at a solid pace and there is little reason to think that the drop in the overall measure suggests that the economy is slipping into a recession. Although the risk of a recession in coming years is rising, last week’s data still point to a solid outlook over the coming quarters.

What we learned last week: (pg. 1)

• Core spending continued to advance in the first quarter
• The core PCE price index may have peaked

What we’re watching this week: (pg. 2)

• Solid growth likely continued for both manufacturing and services
• Job openings projected to be lower, but close to a record high
• Slower, but still very strong payroll growth expected

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