As expected, real GDP for Q1 came in at a suckingly low 0.5%, SAAR. In this case, “SAAR”– seasonally adjusted at an annualized rate”– is important. That’s because there’s some concern with the seasonal adjusters, which some argue are biasing Q1 down and Q2 up. Also, annualized quarterly changes tend to jump around.
So a good way to squeeze out some of the noise is to measure year-over-year changes, which (partially) wash out the seasonal factor (“partial” because BEA allows seasonal factors to change over time, so the SA factor for Q1 this year could be slightly different from Q1 last year).
So, as you see, real GDP is growing around 2% when you smooth out the bumps. That’s not to say there aren’t some worrisome signs of deceleration, but I tend to think of those around longer term trends, like productivity and labor force participation.
Certainly based on the job market, the economy looks better than 0.5%, but that said, the smart move would be to plan for the next downturn, as per Bernstein/Spielberg.