(New York = Yonhap Infomax) Reporter Lim Ha-ram = The US growth rate in the first quarter (January to March) was slower than market expectations.
The US Department of Commerce announced on the 25th (local time) that gross domestic product (GDP) in the first quarter of this year increased by 1.6% at an annual rate compared to the previous quarter, on a seasonally adjusted basis.
This figure is below the market expectation of 2.4% compiled by the Wall Street Journal (WSJ).
The growth rate in the first quarter was lower than the confirmed growth rate of 3.4% in the fourth quarter last year.
The United States publishes GDP three times: preliminary, provisional, and confirmed figures. The figures published today are the first figures for GDP in the first quarter. The revised provisional figures will be released on the 30th of next month.
The US Department of Commerce reported that real GDP increased due to increases in consumer spending, residential and nonresidential fixed investment, and local government spending.
However, the decline in private inventory investment and an increase in imports were said to slightly offset the increase in GDP.
The inflation rate in the first quarter also rose significantly.
It was reported that the price index of personal consumption expenditure (PCE) in the first quarter increased by 3.4%. This is higher than the previous quarter’s figure of 1.8% and was the biggest increase in the last year.
The PCE core price index, which excludes highly volatile food and energy, rose 3.7%, higher than the previous quarter’s figure of 2.0%. The core PCE price index was significantly above the Fed’s 2% inflation target.
On the other hand, consumption, a major variable that accounts for about 70% of the US economy, slowed compared to the previous quarter. In the first quarter, the US PCE cut value increased by 2.5% compared to the previous quarter. It was lower than the previous quarter’s figure of 3.3%.
As the US economic growth rate was slower than expected and inflation persisted, the financial markets cooled.
Before the New York Stock Exchange opened on this day, Dow Jones Industrial Average futures plunged around 450 points. Standard & Poor’s (S&P) 500 index futures and Nasdaq 100 index futures fell 1.3% and 1.7%, respectively.
The yield on the 10-year US Treasury bond was more than 4.7% after the index was published. This is the highest level since November last year.
hrlim@yna.co.kr
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This article was published on the Infomax financial information terminal at 22:20, two hours earlier.
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