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The Survey Sez!

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 2.5 percent in the first quarter of 2013 (that is, from the fourth quarter to the first quarter), according to the "advance" estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 0.4 percent.

This looks, from the first paragraph, fairly decent.

But there are problems buried in the report. Chief among them is that while core prices increased 1.3% (and energy was an actual negative contributor; gas prices were down somewhat during the quarter, primarily) real final sales were only up 1.5%, where last quarter they were up 1.9%.

The difference? Inventory build, which implies soft demand.

Personal income was down as expected (increases in taxes and disappearance of the one-time pull-forward of dividends and capital gains.) You would expect that this would result in an increase in personal current taxes, but you'd be wrong -- they instead fell.

What's most-disturbing is that the "personal savings rate" is now down to 2.6%. This is almost-certainly in actuality negative, since so-called "saving" includes debt paydowns.

I think this is as good as it's going to get for 2013 folks. And if I'm right on that we have very rough sledding ahead of us for the rest of the year.

Source: Q2 GDP Advance: +2.5%