Flowers Weren’t the Only Thing Blooming This Spring: April 26 – 30

Momentum continues to build across the U.S. economy. Here are the five things we learned from U.S. economic data released during the week ending April 30.


The U.S. economy continued to dig out of its hole during Q1. The Bureau of Economic Analysis reports that the Gross Domestic Product (GDP) rose 6.4 percent on a seasonally adjusted annualized basis during the first three months of 2021. Even after following the prior quarter’s 4.3 percent advance, the U.S. economy remained 0.8 percent smaller (inflation-adjusted) than when it peaked during the fourth quarter of 2019. Among the most significant contributors to the surge in economic activity: federal government expenditures swelling 13.9 percent, the 10.8 percent jump in fixed residential investment, the 10.7 percent surge in consumer expenditures (boosted by stimulus checks), and the 9.9 percent rise in nonresidential (business) investment (all percentages annualized). Holding back the economy were continued weakness in imports and shrinking business inventories. The BEA will update this report twice over the next two months.

Personal income surged in March, thanks to stimulus checks. Real disposable income rose a record 23.6 percent on a seasonally adjusted basis during the month as most U.S. households received checks and/or pandemic unemployment support tied to the American Rescue Plan Act of 2021. Without inflation adjustments, nominal disposable income jumped 23.6 percent while nominal personal income’s gain was 21.1 percent per the Census Bureau. Household spent some (but not all) of this largess—real Personal Consumption Expenditures (PCE) increased 3.6 percent. Real spending on goods jumped 7.3 percent, split between increases for durable and nondurable goods of 10.3 percent and 5.6 percent, respectively. PCE for services grew 1.7 percent. The savings rate, inflated throughout the pandemic, nearly doubled in March to +27.6 percent. Inflation also showed more life—the PCE deflator jumped at 0.5 percent while the core PCE deflator (net of both energy and food) grew 0.4 percent. The 12-month comparables for the two measures were +2.3 percent and +1.8 percent, respectively.

Consumers are becoming more and more buoyant. The Conference Board’s Consumer Confidence Index surged by 12.7 points in April to a seasonally adjusted 121.7 (1985=100), its best reading since the start of the pandemic (February 2020). The present conditions index led the way, adding 29.5 points to 139.5, while the expectations index added 1.5 points to 109.8. Also for the first time in more than a year, the percentage of survey respondents seeing business conditions as “good” (23.3 percent) nearly matched that as seeing them as “bad” (24.8 percent). The percentage of people seeing jobs as being “plentiful” rose to 37.9 percent, while those that say jobs are “hard to get” shrank to 13.2 percent. According to the press release, the data suggest “the economic recovery strengthened further in early Q2.”

Meanwhile, the University of Michigan’s Index of Consumer Sentiment rose by 3.4 points in April to a seasonally adjusted 88.3 (1966Q1=100). Not only was the index up 1.8 points from its preliminary April reading reported a few weeks ago, but it was also up 16.5 points from a year earlier. The current conditions index added 4.2 points to 97.2, while the expectations index advanced by three full points to 82.7. The press release links the growing confidence to “a growing sense” that the gains in “jobs and incomes will persist,” the stimulus spending, and increased vaccinations. Further, it states that “the data indicate an exceptional outlook for consumer spending through mid-2022.”

The Fed grows more optimistic but holds still. The policy statement released following the last week Federal Open Market Committee (FOMC) began with its commitment to “using its full range of tools” to promote “its maximum employment and price stability goals.” Next, it noted that “economic and employment [indicators] have strengthened and that many parts of the U.S. economy “have shown improvement.” Since the committee sees that risks to the economy remain, it voted without dissent to keep the fed funds target rate at near-zero percent and to continue adding Treasury and agency mortgage-backed securities to the Fed’s balance sheet.

Durable goods orders gained in March. The Census Bureau estimates new orders for manufactured goods increased by a half percentage point during the month to a seasonally adjusted $256.3 billion (its 10th increase in 11 months). The increase was even greater (+1.6 percent) after netting out the 1.7 percent drop in transportation goods orders. A proxy for business investment—civilian nonaircraft capital goods orders—advanced 0.9 percent. Shipments bloomed 2.5 percent to $257.0 billion (its sixth gain in seven months), with nontransportation goods orders rising 1.5 percent. Unfilled orders increased 0.4 percent to $1.088 trillion while inventories widened 1.0 percent to $431.8 billion.

Other U.S. economic data released over the past week:

  • Jobless Claims (Week ending April 24, First-Time Claims, seasonally adjusted): 553,000, -13,000 vs. the previous week, -2,898,000 vs. the same week a year earlier). 4-week moving average: 611,750 (-86.9% vs. the same week a year earlier).
  • Pending Home Sales (March 2021, Index (2001=100), seasonally adjusted): 111.3 (vs. February 2021 = 109.2, March 2020 = 90.3).
  • FHFA House Price Index (February 2021, Purchase-Only Index, seasonally adjusted): +0.9% vs. January 2021, +12.2% vs. February 2020.
  • Case-Shiller Home Price Index (February 2021, 20-City Index, seasonally adjusted): +1.2% vs. January 2021, +11.9% vs. February 2020).
  • Agricultural Prices (March 2021, Prices Received by Farmers): +2.6% vs. February 2021, +6.4% vs. March 2020.

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