Traders are paying closer than normal attention to the data, which is viewed as backward looking, because of the recession fears and what implication it might have for growth heading into the second quarter. Dow Jones consensus forecast is for 2.5% growth, while CNBC/Moody’s Analytics GDP Survey shows economists have a median forecast of 2.4%.
“Almost half the quarter you had the threat of the March 1 tariff hike hanging over everyone. That went away, but it should not be a surprise the quarter started out on a really weak note. The fears were exasperated by the fact we didn’t have data for awhile and we were kind of in a vacuum,” Stanley said.
Over the past week, as the late quarter data was released, economists boosted their forecasts. The GDP report is expected at 8:30 a.m. ET Friday.
“We already know the first quarter is stronger than people expected. We might get some headline affect, but we’re not going to learn a lot we already don’t know,” said Marc Chandler, chief market strategist at Bannockburn Global Forex.
Stanley said he expects that he expects growth of about 3.3% for the second quarter. He expects to see a comeback by the consumer, after sluggish spending growth in the first quarter. “Given the blowout retail sales we saw in March, the stage was set for a nice bounce back in Q2,” he said. He also said there are signs business spending will also pick up in the second quarter.
Economists said that first quarter growth has traditionally been weaker because of seasonal factors.