US.Economy Instant View--->
Lee:
Looks like a few of the pundits are impressed,some worried about the inflation thing as usual,some worried about higher trade deficit,higher deflator number,higher interest rates etc etc.....Consumer spending saves the day as usual.Oh well you take the good with the bad I suppose.Should be interesting to watch PMI out of Chicago and the Umich's consumer confidence number later on.
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INSTANT VIEW - U.S. GDP rose 4.5 percent in Q1
NEW YORK, April 30 (Reuters) - Following are comments from economists after the U.S. Commerce Department's first estimate that Gross Domestic Product grew by an annualized 4.5 percent in the first quarter of 1999, after a 6.0 percent gain in the fourth quarter of 1998.
Economists polled by Reuters had projected, on average, a 3.3 percent increase.
MICHAEL FRANZESE. TRADER, ZIONS BANK: In the bond market, ''We were hoping for something more like 3.3 or 3.6 percent ... Everybody has a bearish tone. Everybody thinks the Fed has to do something.''
Franzese was speaking on Reuters Television.
KATHRYN KOBE, SENIOR ECONOMIST, JOEL POPKIN AND CO.: ''These numbers are stronger than the bond market anticipated. We are seeing very strong consumer demand and a little more inflation. Will this be enough to induce the (U.S. Federal Reserve) to raise interest rates now? I don't think so. But the concern is this rate of growth will leave us vulnerable to more inflation later on.''
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HENRY WILLMORE, SENIOR ECONOMIST, BARCLAYS CAPITAL: ''What's impressive is how strong domestic demand continues to be. The Fed has to be worried about it. It's very likely that net export numbers will stabilize later this year. As those improve, there's a risk you could see overall growth in the four to five percent range. From such a high level of consumer spending, you can expect some slowing. But I suspect the offset from net exports will be such that even with consumer spending slowing slightly, we'll still see strong growth. The way the stock market is going up, it's not going to slow by a lot.''
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KATHY CAMILLI, CHIEF ECONOMIST, TUCKER ANTHONY: "You have to admit, it's impressive. The last time we had growth rates of this magnitude back-to-back was in the '60s.
''The only negative of the report is the widening of the trade deficit, which always happens in the first quarter.''
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DAVID LEVY, VICE CHAIRMAN AND DIRECTOR OF FORECASTING, JEROME LEVY ECONOMICS INSTITUTE AT BARD COLLEGE: "Inventory stronger than we might have expected, and I wouldn't be surprised if it's revised lower in next month's data. The most notable feature was a tremendous surge in consumer spending. Business investment was not as powerful as we've seen and we think that's going to be the trend. The one big negative in 1999 will be the widening trade deficit.
''Looking at this number, 4.5 is a good growth rate. We're not confident it's going to last, in fact we're quite concerned it's not. Consumers are not going to be able to maintain this pace. I think it's going to be a less robust picture as move into the year.''
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