1Q23 GDP: Slow Growth To Start '23

Bottom Line:  The advance reading of 1st Quarter 2023 GDP showed a gain of 1.1%, less than the consensus, though close to model estimates following revisions to consumption data earlier this week. That said, consumption gains were stronger than expected gains with surprising growth in durable goods consumption. Services consumption was also robust. Residential fixed investment was a drag, mostly as expected. But the big drag was from inventories, which corrected more than expected after 4th Quarter's rebound. Trade and government spending were positive contributors. Overall, Real final domestic demand was stronger, up 2.85% annualized in the quarter, its highest reading since 1st Quarter of 2021. Still, the trend remains tepid, and most data indicate the quarter finished on a slower note (we'll learn more with tomorrow's March spending data), suggesting there's scope for this report to get revised.