The US gross domestic product (GDP), according to final data, in the first quarter of 2016 increased by 1.1% compared with the previous quarter in annual terms, announced the US Department of Commerce. The value is a little higher than the forecast of analysts.
This is the third and the final assessment of the US GDP by the Bureau of Economic Analysis at the US Department of Commerce. Compared to the preliminary GDP estimation, the revision pointed upwards.
However, consumer spending growth in the US slowed in the first quarter. This figure was revised down to + 1.5% from + 1.9%, while economists expected an increase to 2.0%.
"Despite the fact that the final GDP figures were slightly higher than expected, the decline in consumer spending raises questions about the future growth," - says Adam Button, principal analyst at ForexLive. - Fed officials have repeatedly pointed out that the reduction in the number of jobs is balanced by the power of consumer demand. They expect that this would lead to an increase in activity and sustainable economic growth. Instead, we see that the consumer sector is not as solid as previously thought. "
At the same time, the good news in the report on GDP is the revision of the corporate sector of the economy: + 2.2% from + 0.6%. This should allay fears that the corporate sector will cut jobs, analysts say.
The preliminary estimate of US GDP for the second quarter, which will be released on 29 July, will be far more important news.
Immediately after the report, EUR/USD was trading at 1.1083, bouncing from 1.1079 before publication, and GBP/USD was trading at 1.3396, up from 1.3391, while USD/JPY pair was trading at 102 33, falling from 102.37.
USD index, showing the US dollar against a basket of major currencies, was trading at 96.02 compared to 96.07.