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US GDP Falls Slightly

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In the US the official first quarter Gross Domestic Product (GDP) figures have just been released in preliminary form. The headline Q1 annualized figure is showing contraction of -1.0%, this is down on the final quarter of last year which read at 0.1%, there was a -0.2% consensus estimate on today’s figure.

The preliminary GDP Price Index has risen 1.3% in Q1, this compares to the 1.6% experienced in Q4 2013 and easily meets the expected 1.3% anticipated by the market poll.

On the employment front in the US, the Initial Jobless Claims for the week ending May 23rd have fallen slightly to 300k, this represents a drop from the prior week of 326k and comes in better than the anticipate 318k.

Continuing Jobless Claims for the week ended May 16th have just been announced at 2.631M compared to a market estimate of 2.650M and a previous weeks reading of 2.653M.

In a quarter on quarter partial inflation update the US Department of Commerce has published the Personal Consumption Expenditure Prices Index, this has remained stable to read at 1.4%, matching the previous reading of 1.4%, this figure was not anticipated to change this month.

The Core Personal Consumption Expenditure number has also experienced a minor increase on the month, this is now reading at 1.2%, down from the 1.3% seen last month, again no change was anticipated in this reading.

The continuing ‘accommodative stance’ of the Federal Reserve is no doubt enabling the ease at which the US economy appears to be recovering. This however is a bit of a double edged sword as inflation is beginning to take hold at an increasing pace. The Federal Reserve will soon face a dilemma if price growth continues at this rate, it has been a while since we have had an update with regards to the Feds outlook, however no fewer than three Fed policy makers are due to make speeches between now and the end of this week.

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