Last week's report that Gross Domestic Product (GDP) fell in the first quarter at an annualized rate of 0.3% is a warning, not an epitaph. The economy's resilience has limits amid tariffs, government job and spending cuts, and falling business and consumer confidence. While we are not calling for a recession, we are reducing our 2025 estimate for GDP growth to 0.5% from 1.3%. The fact that we are even using the "R word" is significant because there have been only seven recessions in the last 50 years. The U.S. economy is no quitter. Notable events within the last few years -- including two quarters of negative GDP growth, 500 basis points of interest rate increases by the Fed, a nearly 900-basis-point jump in the Consumer Price Index inflation rate, Russia's invasion of Ukraine, and an inverted yield curve - didn't push a resilient (and stimulus-aided) U.S. economy into recession. The National Bureau of Economic Research (NBER), which is the official recession arbiter, defines a recession as "a significant decline in economic activity that is spread across the economy and lasts more than a few months." When we exclude the surge in imports (which reduce GDP) ahead of expected tariffs, GDP noticeably softened in 1Q. But with consumer spending up 1.8% and even home building adding to growth, we would not call it a significant decline. Among other economic reports last week, nonfarm payrolls are one of the indicators that the NBER watches closely. We believe the better-than-expected increase of 177,000 jobs in April and 1.2% growth on a year-over-year basis are encouraging. The Labor Department's diffusion index indicated that more than half of 250 private industries are hiring. Real personal income excluding transfer receipts, another gauge the NBER watches, rose 1.4% from a year earlier. Looking forward, we expect GDP to grow 0.2% in 2Q, 0.8% in 3Q, and 1.5% in 4Q. Our 2026 growth estimate is 1.8%, down from 1.9%.

FLOOR & DECOR HOLDINGS INC-A has an Investment Rating of HOLD; a target price of $76.000000; an Industry Subrating of Low; a Management Subrating of Medium; a Safety Subrating of Medium; a Financial Strength Subrating of Low; a Growth Subrating of Medium; and a Value Subrating of High.

FLOOR & DECOR HOLDINGS INC-A has an Investment Rating of HOLD; a target price of $72.000000; an Industry Subrating of Low; a Management Subrating of Medium; a Safety Subrating of Medium; a Financial Strength Subrating of Low; a Growth Subrating of Medium; and a Value Subrating of High.

FLOOR & DECOR HOLDINGS INC-A has an Investment Rating of HOLD; a target price of $76.000000; an Industry Subrating of Low; a Management Subrating of Medium; a Safety Subrating of Medium; a Financial Strength Subrating of Medium; a Growth Subrating of Medium; and a Value Subrating of Medium.