US first-quarter GDP revised down to 1.6%, pointing to a softer economy
The Commerce Department revised down US first-quarter GDP growth to an annualised 1.6%, from its initial estimate, MarketWatch reported. Weaker inventory investment and the net export drag accounted for most of the downward adjustment. The data point to an economy that is cooling but not in recession.
The Commerce Department revised US first-quarter Gross Domestic Product growth down to an annualised 1.6% pace, according to a MarketWatch report. The revision was marginally weaker than the prior estimate. The bulk of the downward adjustment came from a slowdown in inventory investment, a drag from net exports as imports outpaced exports, and softer services spending.
The data, the analysis in the article said, suggest that the US economy has slowed noticeably from last year but has not entered recession territory. Consumer spending grew at an annualised 1.8% pace, below the strong tempo seen during the previous year. Business investment held up better, supported by spending on equipment. The Atlanta Federal Reserve's GDPNow tracker is signalling an initial second-quarter estimate of about 2.1%.
Economists noted that the combination of softer growth and sticky core inflation, after this week's PCE reading, presents a challenging mix for the Federal Reserve as it shapes its rate path. Analysts quoted by MarketWatch also said fiscal policy uncertainty will be a key factor for the outlook. The views in this article belong to the source and individual investment decisions should be guided by a personal adviser.
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