Friday , April 16 2021

US GDP accelerates in the first quarter and accelerates all expectations

It expanded by 3.2% in the first three months of the year, much higher than the expected 2% of analysts.

Economic growth in the United States accelerated in the first quarter and far exceeded market expectations, fueled by rising commercial activity and greater accumulation of inventories, which compensated for the smaller expansion of consumer and business spending.

The Commerce Department reported that The gross domestic product (GDP) of the world's largest economy rose 3.2 percent in the first three months of the year compared to the same period in 2018.

The increase is improving compared with the 2.2% increase recorded in the last quarter of last year.

It has also far outpaced market forecasts that have decided to grow by 2% according to a Reuters survey and 2.3% according to Bloomberg.

In this way, data divert fears of investors who feared that the economy would move towards a recession after a progressive slowdown that was observed from the second half of last year, when GDP expanded by 4.2% and weak activity data released at the beginning of the year .

Growth in the quarter was also fueled by an increase in government investment.

However, domestic demand grew by 1.3%, the lowest since then 2013 and consumer spending, which accounts for two-thirds of the US economy, slowed down from 2.5% in the fourth quarter of 2018 to 1.2%, which will support the Federal Reserve's decision to break the year at its rate of increase the interest rate.

According to estimates by the Donald Trump administration, the economy will grow by 3 percent this year, over 2.9 percent in 2018, when it registers its widest expansion since 2015, while the International Monetary Fund (IMF) is less optimistic and predicts growth of 2.3%.

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