Thursday April 28, 2005 - 07:35:15 GMT
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ACM REFCO - www.ac-markets.com
FX Economic Release Alerts
US GDP Annualized (1Q A) and GDP Deflator (13:30GMT; 8:30EDT)
GDP- Consensus: 3.5%; Prior: 3.8%
GDP Deflator - Consensus: 2.0%; Prior: 2.3%
Outlook: There is much dissention as to whether GDP growth accelerated or slowed in Q1 2005, with projections ranging from 2.8% to 4.5%. While a widening trade deficit and rising gasoline prices undoubtedly hindered expansion, resilient investment spending will provide support. Most analysts expect personal consumption to have grown by 3.1% in the quarter, down significantly from the previous figure of 4.2%, with much of the slowdown in consumer spending occurring later in the quarter. Business investment spending in equipment and software likely posted another double-digit gain, and inventory build-up remained high (potentially contributing over 1 percentage point to GDP growth). Residential investment and government spending also remained strong in early 2005, but real net exports will steal an-ever increasing share of growth. Furthermore, it appears that nearly all GDP components slowed in the quarter's later stages. As a bottom line, GDP growth probably showed little change from last quarter, with business investment and inventory build-up offsetting the adverse effects of the gaping trade deficit and slowing personal consumption. The price index is expected to have remained between 2.0%-2.3%, as inflationary pressures continue to trickle down from higher energy prices. GDP growth is expected to slow in Q2 2005, reflecting the current (temporary?) soft patch in the US economy.
Previous: The US economy expanded at a 3.8% annual rate in the fourth quarter of 2004, capping the best year of growth since 1999. Consumer and corporate spending both contributed above 2 percentage points to the gain, helping growth stay above the decade's 3.3% annual average despite record-setting oil and gasoline prices. Net exports stole 1.35% from expansion as imports surged 11.4%.
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