Free Trial

MNI BRIEF: US 1Q GDP Short Of Expectations, Consumption Strong


U.S. GDP grew at an annual rate of 1.1% in the first quarter, down from 2.6% in the fourth quarter and below analysts' expectations for a 1.9% increase, according to the Bureau of Economic Analysis's advance estimate released Thursday.

Final domestic demand rebounded to 3.2% from 0.7% in the fourth quarter. Personal consumption expenditures rose a solid 3.7%, the most since the second quarter of 2021, led by purchases of motor vehicles and parts and services like health care and dining out and travel. That contributed 2.5pp to the headline figure. Offsetting consumption were fixed investment, down 0.4%, and a large decrease in inventory investment, especially in wholesale trade and manufacturing that subtracted 2.3 pp from overall growth.

Core PCE inflation accelerated to 4.9% from 4.4% in the fourth quarter, two-tenths stronger than expected, which will keep the Fed on track for another quarter-point rate hike at next week's meeting. Headline PCE inflation was 4.2%, faster than 3.7% in the previous quarter.

MNI Washington Bureau | +1 202-371-2121 |
MNI Washington Bureau | +1 202-371-2121 |

To read the full story


MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.