Is the Pause About to End? What We Learned During the Week of April 27 – May 1

Growing dissent at the Fed. Here are five things we learned from U.S. economic data released during the week ending May 1. 

The Federal Reserve held steady, but voting members were not on the same page. The policy statement released after this past week’s Federal Open Market Committee (FOMC) meeting noted that job gains had “remained low,” while inflation was “elevated” as energy prices rose due to the military action in the Middle East. The committee voted 8-4 to keep the fed funds rate at 3.50 percent to 3.75 percent. One dissenter sought a quarter-point cut in the short-term interest rate target, while three voting members supported keeping the fed funds target as is but did not support including “an easing bias” in the FOMC’s statement.

The U.S. economic growth picked up during Q1. The Bureau of Economic Analysis estimates that Gross Domestic Product (GDP) grew at a seasonally adjusted annualized rate (SAAR) of 2.0 percent, well above Q4’s 0.5 percent increase. The largest contributor to growth was nonresidential fixed investment, adding 139 basis points to GDP growth (including an 88-basis-point contribution from computers and peripheral equipment supporting AI investments). Personal spending added 108 basis points to GDP growth, with government spending and the change in private inventories boosting GDP by an additional 73 and 40 basis points, respectively. Drags on economic activity were net exports (-130 basis points) and residential fixed investment (-31 basis points). The BEA will update its Q1 GDP estimate twice over the next two months.

Personal spending inched up in March in the face of higher prices. Real Personal Consumption Expenditures (PCE) grew 0.2 percent on a seasonally adjusted basis, down from February’s 0.3 percent advance. Real goods spending was up 0.6 percent (durable goods +0.9 percent; nondurables +0.3 percent). Services expenditures grew 0.1 percent. Without inflation adjustments, nominal PCE surged 0.9 percent, partially fueled by 0.6 percent gains in both nominal personal income and disposable income. Real (inflation-adjusted) disposable income declined 0.1 percent. The savings rate held steady at +3.6 percent. Real PCE has risen 2.1 percent over the past year, with real disposable income up 0.4 percent. The same Bureau of Economic Analysis report shows the PCE Price Index jumping 0.7 percent during the month (thanks to rising gas prices) and 3.5 percent from a year earlier. Net of energy and food, prices were up 0.3 percent for the month and 3.2 percent over the past 12 months.

Durable goods orders jumped in March. The Census Bureau estimates that new orders for manufactured durable goods grew 0.8 percent to a seasonally adjusted $318.9 billion. Year-to-date durable goods orders of $942.4 billion were up 6.1 percent from the comparable 2025 months. Transportation goods orders were up 0.8 percent, with motor vehicles up 1.2 percent. Non-transportation goods orders increased 0.9 percent in March, with year-to-date orders 6.7 percent ahead of their year-ago pace. Civilian capital goods, net of aircraft, rose 3.3 percent. Durable goods shipments advanced 0.7 percent to $322.2 billion. Year-to-date durable goods shipments of $931.0 billion were up 7.3 percent from the same three months in 2025.

Housing starts rose in March. Privately owned housing starts jumped 10.8 percent to a seasonally adjusted annualized rate (SAAR) of 1.502 million units. Starts rose in all four Census regions. The Census Bureau measure was also up 10.8 percent year over year, with gains in three of four regions (the Midwest the exception). Looking ahead, permits issued declined 10.8 percent to 1.372 million (-7.4 percent versus March 2025). Single-family home permits dropped 3.8 percent. Housing completions edged up 0.1 percent to 1.366 million units, which was down 12.8 percent from a year earlier.

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

• Jobless Claims (Week ending April 25, 2026, First-Time Claims, seasonally adjusted): 189,000 (-26,000 vs. the previous week, -50,000 vs. the same week a year earlier). 4-week moving average: 207,500 (-8.1% vs. the same week a year earlier).
• Manufacturing PMI (April 2026, Index (>50=Expanding Manufacturing Sector, seasonally adjusted): 52.7 (March 2026: 52.7; April 2025: 48.8
• Conference Board Consumer Confidence (April 2026, Index (1985=100), seasonally adjusted): 92.8 (March 2026: 92.2; April 2025: 85.7).
• FHFA House Price Index (February 2026, Purchase-Only, seasonally adjusted): Unchanged vs. January 2026; +1.7% vs. February 2025.
• S&P Case Shiller Home Price Index (February 2026, National Index, seasonally adjusted): +0.1% vs. January 2026; +0.7% vs. February 2025).
• Agricultural Prices (March 2026, Prices Received by Farmers, not seasonally adjusted): +1.1% vs. February 2026; -7.8% vs. March 2025.

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