Fall in first quarter US GDP was less than we thought
The fall in US first quarter GDP was less than we previously thought, after the Bureau of Economic Analysis revised its figure up.
GDP contracted 0.2 per cent in the first three months of the year, less than the 0.7 per cent originally mooted. However, it's a fall from the first estimate of a 0.2 per cent rise.
The Commerce Department said the revision was down to a rise in personal consumption, while exports decreased less than previously estimated.
However, the US' official statistics office said negative contributions from exports, nonresidential fixed investment and state and local government spending both meant the figure remained low.
The news suggests the Fed could choose to hike interest rates sooner, rather than later. After a meeting earlier this month, analyst consensus was that a rate rise is likely to come in September.
"The US economy is in pretty rude health," said Dennis de Jong, managing director at UFX.
"The GDP reading shows the Fed is on the right path. Janet Yellen would have preferred to be focusing on the proposed interest rate rise, but is likely to be more concerned about what's happening across the Atlantic than her own back yard at present."