The US Department of Commerce raised its estimate of GDP growth to 2% in the first quarter
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The US economy grew in the first quarter by 2% in annual terms, follows from the updated (third and final) estimates Bureau of Economic Analysis (BEA, structure of the Ministry of Trade).
This estimate was significantly higher than the previous estimate (1.3%) released last month, due to “more complete baseline data” showing stronger growth in consumer spending and exports. Analysts notes CNN had expected the estimate to rise to only 1.4%. In the fourth quarter of 2022, US GDP grew by 2.6%.
Thus, consumer spending (PCE index) increased by 4.2%, which is the maximum increase since the second quarter of 2021, notes Bloomberg. Exports up 7.8% after falling 3.7% in Q4 2022
Earlier, the Chairman of the Board of Governors of the Federal Reserve System (FRS) Jerome Powell allowed a recession in the country’s economy, noting that he considers such a scenario less likely. A number of leading Wall Street analysts, including billionaire investor Jeremy Grantham and Morgan Stanley’s chief US equities strategist Mike Wilson, had previously warned of an impending recession and a potential fall in the stock market in the coming months, Vedomosti wrote. According to analysts at The Wall Street Journal, a recession in the US will come with a 44% chance.
On June 14, the Fed kept the base rate at the level of 5-5.25% per annum. The regulator noted the growth of economic activity at a “moderate pace”. Unemployment remains low, while inflation is still elevated. Inflation in the United States in June slowed to 4% in annual terms from 4.9% a month earlier, which was the lowest since May 2021.
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