The above chart shows the percentage change in GDP and the contributions made by its various sub-parts. The data is very revealing, while the expansion of the early 1950s was caused by a combination of government spending (from the Korean War) and pent-up consumer demand, this expansion is starting off with a big increase from PCEs and investment. We see PCEs increase strongly starting in the 2Q and continuing through the end of the year. Investment contributions slightly to the 2Q, but really kicks into gear in the third and fourth quarters. Net exports are an after-thought. And government spending is actually subtracting from overall growth.
