Growth within the U.S. economy rebounded in the first quarter this year, beating analysts’ expectations of 2.5 percent growth with a 3.2 percent growth number. The GDP figure represents the strongest rate of growth for the first quarter in four years and matches the 3.2 percent growth experienced a year ago.
“While the (first quarter) boost from net trade and state and local government spending is unlikely to be repeated in [the second quarter], the main message is that private consumption and investment are slowing down only gradually,” said Brian Coulton, chief economist at Fitch Ratings, in a statement.
As for consumer staples, continued consumption will certainly provide more strength for the sector.
“This year what you’re seeing within the consumer staples market and what we believe will continue into 2020 is an improvement within operating margins, pricing that has been increased for these big bulge bracket consumer staples and you’re starting to see that in the bottom line as well as the topline,” said Chad Morganlander, portfolio manager at Washington Crossing Advisors.
“We would be overweight the consumer staples sector at this inflection point,” added Morganlander. “You’re getting consistent growth, consistent dividend growth, as well as you’re getting companies that have very little leverage.”
For more market trends, visit ETF Trends.