In spite of the latest numbers, White House economic advisor Larry Kudlow said that the U.S. economy is still on pace to realize a 3 percent gain. Furthermore, analysts and economists have been quick to point out that government data has been inconsistent since the 35-day shutdown, which delayed the release of data.
“Right now, we’re still waiting to get enough consistent data so we can assess what’s going on. At this point, these numbers don’t do that,” said Ward McCarthy, chief financial economist at Jefferies. “In some respect, it’s not dissimilar to the December retail sales numbers that were so weak they weren’t believable.”
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Last week’s fall in equities saw a return to safe haven assets like bonds and precious metals. In the meantime, investors were eagerly anticipating any positive news from the latest U.S.-China trade negotiations.
“The most recent economic data fits with our 2019 outlook that suggests economic growth is likely to slow this year but recession prospects remain very low,” said Bruce Bittles, chief investment strategist at Baird, in a note. “This reinforces the view that the Federal Reserve will continue with patience with regards to any future rate hikes until such time that underlying economic fundamentals show significant improvement.”
“As a result, the current weakness in the equity markets should be viewed within the confines of a consolidation phase,” he said.
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