The US GDP grew at an annual rate of 2.5 percent in the first three months of 2013, as consumer outlays unexpectedly rose at the strongest pace in almost three years. But traders were somewhat expecting a faster rate in the first quarter of the year. Figures from commerce Department showed on Friday that first-quarter Gross Domestic Product fetched an advanced reading of 2.5 percent, down from a growth rate of 3.0 percent registered a quarter ago, trailing analysts` overestimated growth rate of 3.0 percent. The fourth quarter was sabotaged by one-offs like the fiscal cliff and Hurricane Sandy, prompting consumers and businesses to slash spending and inventories. Positive gain in consumer spending, which drives two-thirds of the economy, wasn’t enough to nudge GDP above forecast! The government report showed national output generated by the world`s largest economy was boosted by an unexpected gain in personal consumption, rising 3.2 percent in the first quarter, compared with 1.8 percent, strongest pace since three months ended December 2010. More, the GDP price index rose to an advanced 1.2 percent from fourth-quarter`s reading of 1.0 percent, slightly below forecast of 1.3 percent. Core PCE, the Federal Reserve`s favorite gauge of inflation, rose to 1.2 percent, up from 1.0 percent, a quarter ago.
EasyForexNews Research Team