- The United States Gross Domestic Product is projected to have grown at an annualized rate of 0.4% in the first quarter.
- Market participants will be closely monitoring the potential ramifications of tariffs on overall economic performance.
- The US Dollar appears to be consolidating near the lower boundary of its trading range for the year.
The United States (US) Bureau of Economic Analysis (BEA) is scheduled to release its advance estimate of Gross Domestic Product (GDP) for the first quarter on Wednesday. Consensus forecasts anticipate an annualized growth rate of just 0.4%, representing a significant deceleration from the 2.4% expansion observed in the fourth quarter of 2024. This slowdown is attributed to a combination of factors, including a decrease in consumer spending on durable goods and a decline in business investment. Furthermore, a contraction in exports also contributed to the weaker-than-expected growth figure.
Markets brace for key US growth data amid tariff jitters and persistent inflation concerns
Financial markets are bracing themselves for Wednesday’s release of the preliminary US GDP figures for the first quarter, a data point widely recognized as the most impactful of the three GDP estimates released each quarter. In addition to the headline growth number, the report will also feature updated Personal Consumption Expenditures (PCE) data, which serves as the Federal Reserve’s (Fed) preferred metric for gauging inflation. The PCE data will be scrutinized for any indications of inflationary pressures, which could influence the Fed’s monetary policy decisions in the coming months. Analysts are particularly interested in the core PCE reading, which excludes volatile food and energy prices, providing a clearer picture of underlying inflation trends.
This quarter’s economic data holds particular significance as investors seek early indications of the potential economic consequences stemming from the recently implemented tariffs by President Donald Trump. With both economic output and domestic price levels under scrutiny, the data has the potential to provide crucial insights into the broader macroeconomic effects of the administration’s trade policies. The market is keen to assess whether the tariffs are contributing to inflationary pressures or dampening economic activity. Furthermore, the report will be analyzed for any signs of supply chain disruptions or shifts in trade patterns resulting from the tariffs. The impact of these trade measures on corporate earnings and investment decisions will also be closely monitored.
