US officials will today release an initial first-quarter estimate of the country’s gross domestic product. Forecasts of today’s release vary;
US officials will today release an initial first-quarter estimate of the country’s gross domestic product.
Forecasts of today’s release vary; the Federal Reserve Bank of Atlanta estimates a figure of 2.8%, while analysts polled by Refinitiv suggest a figure closer to 1.9%.
It is likely that growth will have slowed in the three months to March. First quarter growth tends to be weaker due to seasonal factors such as unusually harsh weather and other idiosyncratic considerations. The impact of the partial federal government shutdown, the longest in US history, is also likely to be felt.
Investors will be watching closely amid concerns over a global and US economic slowdown. Over the past three consecutive quarters, US economic growth has slowed from 4% to 3.4% and then to 2.4%.
However, even if growth does decrease again in the world’s largest economy, this is not necessarily alarming. Last year’s 4% rate was highly unusual, partly spurred by tax cuts. Indeed, most economists believe a rate closer to 2.5% will be more sustainable, while helping the central bank reach its inflation target of around 2%. Meeting this inflation target will keep prices down and consumer spending up, prolonging overall growth.
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