Live Markets: Data stew: GDP, PCE, jobless claims, et al

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30/04/2026 16:32

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DATA STEW: GDP, PCE, JOBLESS CLAIMS, ET AL

A flood of data inundated investors on Thursday and there's nothing to do but dive right in.

The U.S. economy grew by 2.0% at a quarterly annualized rate in the first three months of 2026, marking a rebound from the fourth quarter's languid 0.5% growth rate but shy of the 2.3% consensus.

Below the surface, the Commerce Department's first stab at first-quarter GDP USGDPA=ECI shows international trade was a net detractor, dampening the topline by 1.3 percentage points. While private investment added 1.5 pps to the total, construction of residential and non-residential structures detracted 0.3 and 0.2 pps, respectively.

Consumer spending, which accounts for about 70% of the U.S. economy, rose by 1.6%, down from 1.9% in Q4. A 0.1% drop in expenditures on goods was offset by a 2.4% jump in spending on services. All told, consumer spending contributed 1.1 pps to the headline.

"The core of the economy remained solid in Q1, driven by the AI buildout and the tax cuts beginning to feed through," writes Michael Pearce, chief U.S. economist at Oxford Economics. "Those factors will continue to drive growth over the rest of the year, but the jump in energy prices will take some of the shine off what would otherwise have been a strong year for the economy."

The Commerce Department also released its March Personal Consumption Expenditures (PCE) report USPCE=ECI.

Starting with the PCE price index, the Fed's preferred inflation yardstick, headline and core prices (which exclude food and energy items) increased on a monthly basis by 0.7% and 0.3%, respectively.

Year-on-year, headline inflation heated up to 3.5% and core prices increased by 3.2%.

Every metric hit the consensus bull's eye.

"For now, we can label (inflation) transitory," Peter Cardillo, chief market economist at Spartan Capital Securities, tells Reuters. "However, if the war continues and energy prices do not come down from the present levels, that transitory inflation will become constant inflation and certainly a major headache for the Federal Reserve."

Elsewhere in the report, personal income increased by 0.6%, double the rate analysts expected and a solid bounce-back from February's 0%.

Personal consumption grew by 0.9%, in line with economists' projections and stronger than the previous month's 0.6% reading. Much of that consumption occurred at the gasoline pump; $81.3 billion of it, in fact.

With outlays outpacing income growth, the saving rate - or the unspent portion of disposable income - dropped to 3.6% from 3.9%.

Switching to the labor market, 189,000 U.S. workers joined the queue outside the unemployment office USJOB=ECI last week, 12.1% fewer than the week prior and 26,000 south of consensus.

"The last time claims printed this low was September 1969," notes Carl Weinberg, chief economist at High Frequency Economics. "At some point, elevated energy costs and prices for materials will cause firms to lay off marginal workers to protect profit margins, but there is no sign of that here."

Despite the weekly drop, cumulative labor market data still suggest the U.S. economy is in a low-hire/low-fire phase amid ongoing geopolitical and economic uncertainties.

Ongoing jobless claims USJOBN=ECI, which are reported on a one-week lag, dropped 1.3% to 1.785 million, or 30,000 fewer than analysts expected.

That's the lowest continuing claims reading since May 2024.

The Labor Department released its employment cost index USEMPC=ECI, which rose by 0.9% in the first quarter on a quarterly annualized basis, a shade warmer than the 0.8% economists anticipated.

While wages grew by 0.8%, the cost of benefits accelerated to 1.2% from 0.8% in Q4.

Next, Midwest factory activity unexpectedly contracted this month.

MNI Indicators' Chicago purchasing managers' index (PMI) USCPMI=ECI dropped 3.5 points to print at 49.2, dipping below 50, the magic PMI border dividing contraction and expansion.

Market participants will get a clearer picture of the state of U.S. manufacturing on Monday, when the Institute for Supply Management (ISM) releases its nationwide PMI.

Analysts expect that report to show U.S. factory activity expanded at a slightly accelerated pace, rising to 53.0 in April from March's 52.8.

Finally, the Conference Board's (CB) Leading Economic Index (LEI) USLEAD=ECI dropped by 0.6% in March, marking a sharp reversal from February's 0.3% gain.

The index is an amalgamation of 10 forward-looking economic indicators, including initial jobless claims, ISM new orders, building permits, yield spreads and S&P 500 price performance, among others.

"The LEI continues to signal a slowdown in the economy over the coming months, as higher oil prices and supply chain tensions will likely place additional upward pressure on inflation and further reduce consumers’ purchasing power," says Justyna Zabinska-La Monica, CB's senior manager of Business Cycle Indicators. "The labor market, while currently stable, may soften with hiring slowing and unemployment edging higher."

(Stephen Culp)

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EARLIER ON LIVE MARKETS:

US STOCKS MIXED IN EARLY TRADE AFTER DATA FLURRY, BIG EARNINGS CLICK HERE

S&P 500 HOVERS NEAR HIGHS AS TECH EARNINGS COUNTER CRUDE AND DATA CROSSCURRENTS CLICK HERE

NO MORE 'GOOD PLACE' CLICK HERE

SOFTWARE STOCKS STUCK "TRYING TO DISPROVE A NEGATIVE" - SCHRODERS CLICK HERE

A FRAGILE START ON A BUSY EARNINGS DAY CLICK HERE

EUROPE BEFORE THE BELL: SHAKY STOCKS CLICK HERE

CENTRAL BANK HAWKS SPOOK BONDS, TECH UNTROUBLED CLICK HERE

Early trade April 30 https://fingfx.thomsonreuters.com/gfx/mkt/lbpgyymmkpq/Pasted%20image%201777557409990.png

GDP contributors https://www.reuters.com/graphics/USA-STOCKS/egvbeebgnpq/gdp.png

Inflation gauges https://www.reuters.com/graphics/USA-STOCKS/jnpwrrkzzvw/inflation.png

Personal consumption https://www.reuters.com/graphics/USA-STOCKS/egpbeebwnvq/perscons.png

Jobless claims https://www.reuters.com/graphics/USA-STOCKS/lgvdggqgrpo/joblessclaims.png

Employment cost index and job openings https://www.reuters.com/graphics/USA-STOCKS/lbvgyymykvq/eci.png

Chicago PMI vs ISM https://www.reuters.com/graphics/USA-STOCKS/byvrnnbnyve/chicagopmi.png

Leading economic index and consumer expectations https://www.reuters.com/graphics/USA-STOCKS/akveyyjywvr/lead.png

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