EXCEPTIONAL ECONOMY

The economy continues to pleasantly surprise, to wit, 24Q1 GDP growth is being revised up, and thus rate cuts keep getting delayed. What’s going on? Several things. The rise in home prices and equities is slightly boosting consumer spending. Second, immigration is meaningfully higher than we think. Income to undocumented workers is not reported, hurting weak GDI, but their spending is, boosting strong GDP. Lastly, labor productivity is strong.