US GDP contracted 0.7% in the first quarter

FXStreet (Mumbai) – The US government report released on Friday showed the US economy shrank 0.7% quarter-on-quarter, compared to the preliminary estimate of a 0.2% expansion. The markets were expecting the second estimate to show a contraction of 0.9%.

The economy contracted on the back of a smaller inventory buildup and weaker net exports than previously reported. The consumer spending remained little changed at 1.8%, while the inventories increased USD 95 billion instead of USD 110.3 billion.

Meanwhile, the imports were revised higher to 5.65 from 1.8%, while the exports fell 7.6%, leading to a larger trade deficit, which dragged GDP lower.

Core personal consumption expenditure (pce), an inflation gauge tracked by the Fed, was revised lower to 0.8% quarter-on-quarter from the initial estimate of 0.9%.

The US government report released on Friday showed the US economy shrank 0.7% quarter-on-quarter, compared to the preliminary estimate of a 0.2% expansion. The markets were expecting the second estimate to show a contraction of 0.9%.

(Market News Provided by FXstreet)