Weekly Economic Report 5.1.26

As always, with the first report of quarterly GDP we estimate domestic corporate profit growth – the key lead indicator in a capitalist economy! This quarter, profits as a share of GDP broke through 12%, to a record high. The key driver was a brisk 5.6% nominal growth rate – driven by a booming 23.9% annualized gain in equipment spending and a 10.5% gain for intellectual property. Nominal consumer spending rose at a 6.1% annual rate, though compensation was limited to 4.0% growth, as firms fattened margins. Both residential and nonresidential construction contracted – again, as in the past four quarters. Exports surged – but imports surged even more – widening the trade gap by 0.3% of GDP. Finally, government rebounded to a 5.7% growth rate, after the fourth quarter slump due to the shutdown. A drop in indirect taxes, as tariffs were reduced, added to profits, helping offset higher energy costs – which should into continue in Q2.

EU05-01-2026.pdf

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