Well deserved! I have always found Hilary an inspiring colleague, from her always constructive seminar comments to her impressive service as editor. My favorite, the belly laughter that let you know she is in the house! And her commitment to public service is legendary

Apropos of nothing, it feels surreal that April ends in one day. Anyone else?

The biggest improvement to my working relationship with Martha Gimbel was switching my default IM opener from 'hi' to 'hi you're not fired'

wsj.com/lifestyle/work… The Wall Street Journal

Ok nerds, let’s talk triangle weighting. A lot of people (well, two…) have asked my why March core PCE inflation came in as expected at 0.3%, when that was the expectation *before* the GDP report came out with the higher-than-expected core rate for Q1. After all…

…isn’t March part of Q1? The answer has to do with how monthly changes are weighted when taking annualized quarterly averages. Yes, March is of course in there, but w a relatively low wgt. Here’s the basic scheme:

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Real private domestic final purchases (PDFP), which removes net exports, inventory investment, and government spending, is estimated to have grown by 3.1% at an annualized rate, a strong pace. In 2023:H2, real PDFP grew by a similar average pace of 3.2%. 2/

As the CEA discussed in the 2015 Economic Report of the President, PDFP can be a better measure of underlying GDP growth because it removes some of the more volatile elements of GDP that may not predict growth in future quarters. 3/

obamawhitehouse.archives.gov/sites/default/…

I’m still not used to the CEA twitter thread going up at 9am instead of 930am

The chart below shows how much broad components of GDP contributed to grown in Q1, 2023 Q4, and on average over 2017-19. You can see the significant swing in exports. Goods consumption also cooled a bit. Services consumption and residential investment firmed.

The bad news in this report is not new news: quarterly inflation accelerated. I think Q1 overstates the remaining excess inflation--trend is probably running more like 2 1/2-3%--but it's still anxiety-inducing.

The reason economists look at PDFP in tandem with overall GDP is that PDFP is actually better at predicting next quarter's GDP than GDP itself. Inventories and trade are volatile and add noise to forecasts. So PDFP is not 'actual GDP' but it's a better measure of underlying trend

The guts look a lot stronger than headline to me, probably a positive read through for Q2.

It’s a PDFP kind of day obamawhitehouse.archives.gov/blog/2015/02/2…

Real GDP growth came in at 1.6% in Q1, softer than expected. But that appears to be driven by weakness in volatile components, especially net exports. Private domestic final purchases--'core GDP' made up of consumption & fixed investment--grew 3.1%, a very strong print.

Listen: Wendy Edelberg joined The Brookings Institution’s #TheCurrent podcast to discuss how our economy is doing better—and where we need policy to fill in the gaps. brookings.edu/articles/what-…

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Finally, we offer a build-your-own CTC interactive tool, allowing users to design custom proposals along dimensions like refundability and inflation indexing—with budgetary and distributional effects as output. (10/10) budgetlab.yale.edu/research/child…

Now, we stress that these numbers are especially uncertain. It's an approach best understood as illustrative. But we think it's a useful starting place for ballparking the plausible magnitude of the CTC's longer-term economic effects on kids. (9/10)