What to watch

Economists disagree on weak Q1 numbers

And now for something completely familiar: another weak first quarter of economic growth.

That’s what economists are looking for when the Commerce Department next Friday reports gains in U.S. gross domestic product in the first three months of 2017. And why not? The economy’s performance has been sluggish in four of its seven first-quarter showings since the recession ended in 2009.

Now, though, economists are starting to disagree about causes.

Like many analysts, Mark Zandi, chief economist of Moody’s Analytics, points to the challenges the government faces making seasonal adjustments that account for harsh winter weather and other factors.

But Nomura’s Lewis Alexander believes Commerce has made some tweaks to correct those flaws. He notes business investment, exports, defense spending and state and local government outlays — all of which have been subject to the seasonal adjustment quirks — likely contributed to growth during the first three months of the year.

Rather, he says, consumers — workhorses for the economy in recent years — are likely to blame for the latest sluggish first-quarter showing. Retail sales were mixed. And the warm weather meant reduced spending on utilities, notes RBC Capital Markets. Business stockpiling was also expected to slow. Economists expect Commerce to announce the economy grew 1.2% at an annual rate in the first quarter, below the recovery’s modest 2.1% average.