EcoWeek

Stronger than the contraction of GDP suggests  

Eco week 22-19 // 9 mai 2022  
economic-research.bnpparibas.com  
9
ECONOMIC PULSE  
UNITED STATES: STRONGER THAN THE CONTRACTION OF GDP SUGGESTS  
Contrary to expectations (annualised quarterly growth of 1%) US GDP contracted by an annualised quarterly rate of 1.4% in Q1 2022. This surprise  
fall hides a more nuanced and less negative reality. The economic engines of household consumption and business investment are robust and  
contributed 1.8 points and 1.3 points of growth respectively. However, reduced inventories at companies (contribution from changes in inventory  
of -0.8 of a point) and a reduction in public spending (contribution of -0.5 of a point), due to the ending of several support programmes, had a  
negative effect on growth. But the biggest negative contribution came from international trade (-3.2 points), which was the main reason for the  
drop in quarterly GDP. On the one hand, imports decreased in goods, especially non-food and non-automotive consumer goods. On the other  
hand, exports in goods fell, due to the war in Ukraine and the resurgence of the Omicron variant of Covid-19, but it was partly offset by an increase  
of exports in services.  
In the labour market, the news remained good: 428,000 non-farm jobs were created in April; the unemployment rate was 3.6% in April, its lowest  
for 50 years; and there are clear signs of labour shortages, with an historically low ratio job seekers per job opening (0.6 in March). This robust  
labour market is dragging wages upwards in its wake (with a year-on-year rise of 5.6% in April), which will help mitigate somewhat the impact  
of the inflationary shock on households’ real disposable income.  
The issue of persistently high inflation (8.5% year-on-year in March) is more relevant than ever and explains the Fed’s recent decisions. The FOMC  
raised its policy rate by 50 basis points at its meeting of 3 and 4 May, taking it to 1% (upper end of the target range). In its forward guidance, the  
FOMC points towards further, similar increases at its next meetings. Meanwhile, the Fed has announced a gradual reduction in its balance sheet  
at a monthly rate of USD47.5 billion from June to August, and then USD95 billion from September.  
Félix Berte  
UNITED STATES: QUARTERLY CHANGES  
ISM  
Manufacturing  
3-month moving average (actual)  
-- 3-month moving average (4 months ago)  
-
6
5
4
3
2
1
0
.0  
.0  
.0  
.0  
.0  
.0  
.0  
ISM  
Services  
Industrial production  
Housing Starts  
Consumer Confidence  
Personal Consumption  
-
-
-
-
1.0  
2.0  
3.0  
4.0  
Unemployment Rate  
Nonfarm Payrolls  
PCE Core Price Index  
Average Hourly  
Earnings  
CPI  
SOURCE: REFINITIV, BNP PARIBAS  
The indicators in the radar are all transformed into ‘z-scores’ (deviations from the long-term average, as standard deviations). These z-scores have mean zero and their values  
are between -4 and +6. In the radar chart, the blue area shows the actual conditions of economic activity. It is compared with the situation four months earlier (dotted-line). An  
expansion of the blue area compared to the dotted area signals an increase in the variable.  
The bank  
for a changing  
world  
QUI SOMMES-NOUS ? Trois équipes d'économistes (économies OCDE, économies émergentes et risque pays, économie bancaire) forment la Direction des Etudes Economiques de BNP Paribas.
Ce site présente leurs analyses.
Le site contient 1811 articles et 362 vidéos