From Bad to Worse: A Contraction in Q1 GDP Growth?
· The trade balance data this week, for March, showed that the trade deficit was $40.4 billion, suggesting that all else equal, there will likely be a downward revision to the already-soft 0.1 percent GDP growth in Q1.
· The ISM Non-Manufacturing index indicated that the service side of the economy continued to expand in April with business activity and new orders rising for the month.
· In the wake of the soft Q1 GDP growth, productivity declined 1.7 percent for the quarter, while unit labor costs jumped 4.2 percent.
· However, we maintain our expectations for better growth the rest of 2014.economy