In the first quarter, the United States’ GDP growth rate was 1.6%, below the anticipated 2.5% and lower than the previous quarter’s 3.4%.
In the first quarter of the year, the US economy experienced a more pronounced slowdown than initially anticipated, with a growth rate of 1.6%, falling short of the expected 2.5%. Despite this deceleration, the economy maintained a solid performance by historical standards. Over the past 12 months, economic growth has been on a steady decline, which could signal favorable conditions for lower interest rates. However, the Federal Reserve has emphasized its cautious approach and indicated no immediate plans to cut rates.
The United States GDP Price Index for the first quarter exceeded expectations, rising to 3.1% compared to the anticipated 3.0%, and marking a significant increase from the previous 1.7%. Meanwhile, GDP sales saw a growth rate of 2.0%, down from the previous 3.9%.The first-quarter U.S. economic growth slowed more than anticipated, with Gross Domestic Product (GDP) increasing at a 1.6% annualized rate, according to the Commerce Department’s advance estimate.
2. Economists, who were surveyed by Reuters, had projected GDP to rise at a rate of 2.4%, following a 3.4% growth rate in the previous quarter.
3. Despite the lower-than-expected GDP growth, the Personal Consumption Expenditure inflation component showed surprising strength, suggesting the Federal Reserve might postpone any interest rate cuts until September.
4. Market reactions were notable across various sectors:
– Stocks: S&P 500 futures indicated a decline of 1.27%, signaling a potential drop in Wall Street’s opening.
– Bonds: U.S. 10-year yields climbed to 4.721%, while two-year yields reached 5.012% post-release.
– Forex: The U.S. dollar index strengthened by 0.113% in response to the news.
Continuing jobless claims in the US stood at 1,781K, slightly below the expected 1,814K but slightly higher than the previous figure of 1,796K. Additionally, the Core PCE Prices for the quarter surged to 3.70%, surpassing the expected 3.40% and showing a considerable jump from the previous 2.00%.
The four-week average for jobless claims was recorded at 213.25K, a slight decrease from the previous 214.50K. Initial jobless claims came in at 207K, missing the expected 214K but slightly lower than the previous figure of 212K.
PCE Prices for the quarter rose to 3.4%, compared to the previous 1.8%. Real consumer spending, however, saw a decline, with a growth rate of 2.5% falling short of the expected 2.8% and the previous figure of 3.3%.
The US goods trade balance for March widened to -$91.83B, exceeding the expected -$91.10B and slightly higher than the previous -$91.84B. Wholesale inventories for the month experienced a decrease of 0.4%, contrasting with the expected increase of 0.2% and the previous figure of 0.4%.
The first-quarter U.S. economic growth slowed more than anticipated, with Gross Domestic Product (GDP) increasing at a 1.6% annualized rate, according to the Commerce Department’s advance estimate.
Despite the lower-than-expected GDP growth, the Personal Consumption Expenditure inflation component showed surprising strength, suggesting the Federal Reserve might postpone any interest rate cuts until September.
Market reactions were notable across various sectors:
– Stocks: S&P 500 futures indicated a decline of 1.30%, signaling a potential drop in Wall Street’s opening.
– Bonds: U.S. 10-year yields climbed to 4.722%, while two-year yields reached 5.012% post-release.
– Forex: The U.S. dollar index strengthened by 0.114% in response to the news.
Continuing jobless claims in the US stood at 1,781K, slightly below the expected 1,814K but slightly higher than the previous figure of 1,796K. Additionally, the Core PCE Prices for the quarter surged to 3.70%, surpassing the expected 3.40% and showing a considerable jump from the previous 2.00%.
The four-week average for jobless claims was recorded at 213.25K, a slight decrease from the previous 214.50K. Initial jobless claims came in at 207K, missing the expected 214K but slightly lower than the previous figure of 212K.
PCE Prices for the quarter rose to 3.4%, compared to the previous 1.8%. Real consumer spending, however, saw a decline, with a growth rate of 2.5% falling short of the expected 2.8% and the previous figure of 3.3%.
The US goods trade balance for March widened to -$91.83B, exceeding the expected -$91.10B and slightly higher than the previous -$91.84B. Wholesale inventories for the month experienced a decrease of 0.4%, contrasting with the expected increase of 0.2% and the previous figure of 0.4%.
Market participants are not completely pricing in a rate cut before December in Fed Swaps contracts.
U.S. Treasury Secretary Yellen mentions the possibility of GDP data revisions, notes a downward trend in inflation, and emphasizes the Fed’s stance on requiring further evidence for a sustainable inflation decline. She also asserts that she doesn’t perceive the U.S. economy as overheated.
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