The U.S. real GDP advance data for the first quarter of 2017 is expected to affirm a deceleration of the economic growth to a below-trend pace. According to market consensus, the U.S. economy is likely to have expanded 1.2 percent in the March quarter. However, according to a TD Economics research report, the U.S. economy is likely to have expanded 0.6 percent in the quarter, suggesting a drag from a drawdown in inventory.
Real consumer spending might sharply decelerate to a pace below 1 percent, owing to a reduced spending on motor vehicles and a warmer winter that impeded spending on energy. However, with the strong incomes, sustained growth in job and declining slack, the U.S. economy is expected to recovery healthily in the June quarter, according to TD Economics.
Meanwhile, business investment is likely to show a rebound in both machinery and equipment and structures expenditure. These two important categories have recorded protracted weakness since the oil shock, stated TD Economics. Residential investment is also expected to strongly add to the economic growth.
However, the headline real GDP growth reading might be in stark contrast to the comparatively bullish survey data. The U.S. Fed is expected to look through the below-trend first quarter growth given the strong labor market conditions, added TD Economics.
The material has been provided by InstaForex Company – www.instaforex.com
April 22, 2017 at 04:28AM