Expectations of Negative U.S. GDP

Markets are braced for the first negative quarterly U.S. GDP reading in three years, and they should look past it, despite the buying frenzy in the bond market.

Economists expect to see a negative 0.5 percent print for first-quarter GDP, revised from a first reading of 0.1 percent. First-quarter growth was hampered by severe weather though not everyone is convinced that weather was the only factor.

Deutsche Bank’s chief U.S. economist, Joseph LaVorgna, expects to see a decline of 0.8 percent, and he sees weather as the culprit. “That’s predominantly based on less construction spending and less inventory investment,” he said, noting first-quarter GDP could ultimately be revised to a positive number in the third and final reading next month.

CNBC

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.