US Economy Grows Faster but Misses Expectations

Analyst forecasts had estimated a 3.00% growth rate, but the final figures came in at 2.5%

The US economy grew at an annualised rate of 2.5% in the first three months of the year, supported by the strongest consumer spending figures in two years.

While the growth figure was lower than analysts’ expectations, it was better than the 0.4% rate recorded in the final quarter of last year.

Consumer spending rose at an annualised rate of 3.2%.

But government spending cuts, particularly in defence, held growth back.

Part of the pick up in growth was due to US farmers filling up grain silos following last year’s devastating drought. Removing these inventories, GDP growth was closer to 1.5%.

The figures could renew calls for the Federal Reserve to maintain its monetary stimulus programme of quantitative easing. The central bank meets next week and it is widely predicted that it will stick to its $85bn-a-month bond-buying schedule.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza