ASA’s May Economic Report: Economy Holds at 3.3%—But Volatility Is Rising Beneath the Surface

From May’s ASA Monthly Economic Report: Data from the Atlanta Fed-produced GDPNow, a running estimate of real GDP growth based on available economic data for the current measured quarter, has been showing some signs of stress but thus far this has not set off many alarm bells. It had been sitting very close to 4.0% and that was considered unusually robust. Now the data has dipped to 3.3% and that is still relatively high. The drivers of that growth have been consistent but there is some nervousness appearing. This expansion has been driven by the upper third of consumers (making $100,000 or more). Their willingness to spend is driven heavily by stock market performance and that is where much of the volatility seems to be coming from.

The monthly ASA Economic Report is produced by Armada Corporate Intelligence, ASA’s business intelligence partner, and is available as a free member benefit for ASA members through the MyASA portal at www.asa.net/myasa.

Armada also wrote that the oil and war conflict just drags on and on and nobody has a clue what to expect. The US keeps declaring that peace is at hand and nothing comes of it. Iran shows no signs of capitulating on key points, and the pressure just mounts on the US. The oil industry has indicated that the end of June is the point of no return with massive price hikes possible

What to Watch: What happens if and when there is a ceasefire? Analysts assert it will be months before normality and that means months of high oil prices. This means an economic impact that drags into Q3 and maybe Q4.

The report also answers a reader’s question of the month: Are Interest Rate Reductions Off the Table?

Again, ASA members can access the Monthly Economic Report through the MyASA portal at www.asa.net/myasa.