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Review of the US Economic Data releases from last week
“U.S. economy started to accelerate since December 2017.”
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The U.S. dollar got a boost last week as the newly appointed Fed Chairman Jerome Powell gave his testimony to the U.S. Congress.
In his prepared remarks, Powell said that the U.S. economy was bright and that he was optimistic on further expansion.
Powell said that the U.S. economy started to accelerate since December 2017.
This is true considering that the first quarter GDP forecasts are running close to the 3.0% rate of expansion.
Although Powell did not comment on the rate hikes in March or how many more times the Fed will hike rates this year, the comments sent the market expectations higher for a March rate hike.
U.S. Q4 GDP revised lower to 2.5%
The fourth quarter GDP report for the year ending December 2017 was revised lower to show a 2.5% gain compared to the first estimates that showed a 2.6% increase. This was broadly in line with the economist’s projections.
The slightly lower revision came on account of greater than expected decline in the private inventory investment.
Still, compared to a year ago, the U.S. economy was seen advancing 2.5%, up from 1.8% increase that was registered the year before.
The data did not dent the sentiment in the U.S. dollar which still managed to hold some ground against some of the currencies as the revised GDP matched the estimates.
The newly revised Q4 GDP reflects a marked slowdown from the third quarter where the U.S. economy grew at the fastest pace, rising 3.2% during the period.
The decline in growth also came due to a jump in imports. However, offsetting these were increased consumer spending, government spending and non-residential fixed investment.
Exports were also seen briefly rising which managed to offset the full impact on the increase in imports.
The GDP came on the heels of the pending home sales report which surprised as pending home sales fell 4.7% on the month in January.
Data from the National Association of Realtors showed that pending home sales fell to 104.6 compared to the previous month.
This was also the biggest decline in more than three years.
“Last month’s retreat in contract signings occurred because of woefully low supply levels and the sudden increase in mortgage rates,”
said Lawrence Yun, the trade group’s chief economist.
