INITIAL FIRST-QUARTER 2019 GDP ESTIMATE WAS NOT CREDIBLE

Downturn Has Just Begun; Recession Remains in Play, With
FOMC-Generated Financial Stresses Still Diminishing Consumer Activity

Consumer Controls 72% of GDP, but Generated Only 22% of GDP Growth

Advance First-Quarter Real GDP Gain of 3.17% Topped Consensus
Forecasts, Strengthened Against 2.17% in the Fourth-Quarter,
Yet the Numbers Were of Unusually Poor Quality

Bureau of Economic Analysis Is Hamstrung by Data-Quality Issues Tied to
Underlying Government Shutdown Reporting Disruptions and Distortions

Only Two Months of the First-Quarter Trade Deficit Were Available,
Where Initial Quarterly GDP Estimates Usually Are Based on Three Months

That Two-Month Quarterly Trade Deficit Narrowed Sharply, Signaling a
Great Recession Style Collapse in Personal Consumption; That Deficit Guess
Was the Largest Single Positive Contribution to First-Quarter GDP Growth

Positive Impact of the Deficit Narrowing Should Have Been Offset by an Even
Greater Decline in Goods Consumption, Which Dropped Sharply, But Not Enough

Three Months of Likely Downside Revisions to First-Quarter GDP Follow,
Into the July 26th GDP Benchmarking

Broad Money Supply Velocity Slowed in First-Quarter 2019,
Suggestive of a Slowing Economy

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