GDP comes in slightly lower than consensus estimates
US GDP (Gross Domestic Product) rose at a rate of 6.4% during the first quarter of 2021, the US Bureau of Economic Analysis revealed on Thursday.
The figure is a percentage point below market expectations of 6.5%.
Looking into the future, economists have put forward estimates of a GDP growth rate of 8.2% during the second quarter of the year.
The S&P 500 opened up by 0.3%, while the Nasdaq composite held steady. The Down Jones Industrial Average rose by 0.7%
The wider stock market has held steady this week amid fears over oncoming inflation as the Federal Reserve hinted that talks over altering the rate of asset purchases in the near-term may soon commence.
Commenting on US GDP and pandemic-low jobless figures, Ali Jaffari, head of North American Capital Markets at Validus Risk Management, said: “US initial jobless claims and QoQ GDP came in slightly lower than consensus estimates at 406K and 6.4% respectively. Employment data remains a key focus for the Fed and a continued convergence to pre-pandemic levels will certainly drive the thinking on tapering discussions.”
“The jobless claims print has been on a declining trend and this week’s figures mark a pandemic low. As the US economy progresses with its vaccination program and reopening measures, employment and labor force participation are expected to pick up in the coming months. While US Treasuries declined on the release, equity futures continue to be range bound.”
“Looking ahead, although this GDP and jobless claims print may not be sufficient to change the Fed’s thinking, a continued trend will certainly place pressure on the Fed to initiate talks on the reduction in its pace of asset purchases.”
