25 Jun 2014
US Q1 GDP reading downgraded by much more than expected - ING
FXStreet (Łódź) - Following the third release of US GDP Q1 data, which revealed a revision of the annualized figure from -1% to -2.9%, James Knightley from ING points out that this leaves US annual growth at just 1.5% year-over-year.
Key quotes
"The consensus expectation was for a -1.8% reading. The damage was largely done through the private consumption component, which is now reported as rising just 1% versus 3.1% previously."
"Gross private investment remained an 11.7% contraction while government consumption was left at -0.8%. However, exports were revised down and imports revised up meaning that the contribution from net trade is to subtract 1.5% from GDP growth rather than 0.95% as previously announced."
"Nonetheless, reaction should be fairly muted given widespread expectations of a sharp bounceback in 2Q14 and the fact that the weather had such a damaging impact on 1Q activity."
"Indeed, we suspect that we could see GDP rise by more than 5% annualised in 2Q. High frequency numbers for the quarter have looked good while inventories should also make a significantly positive contribution after having been run down sharply."
Key quotes
"The consensus expectation was for a -1.8% reading. The damage was largely done through the private consumption component, which is now reported as rising just 1% versus 3.1% previously."
"Gross private investment remained an 11.7% contraction while government consumption was left at -0.8%. However, exports were revised down and imports revised up meaning that the contribution from net trade is to subtract 1.5% from GDP growth rather than 0.95% as previously announced."
"Nonetheless, reaction should be fairly muted given widespread expectations of a sharp bounceback in 2Q14 and the fact that the weather had such a damaging impact on 1Q activity."
"Indeed, we suspect that we could see GDP rise by more than 5% annualised in 2Q. High frequency numbers for the quarter have looked good while inventories should also make a significantly positive contribution after having been run down sharply."