U.S. economic growth for Q1 2024 was revised lower in the second estimate, with annualized GDP now only 1.3% when the markets expected it to keep its initial 1.6% reading.
According to the Bureau of Economic Analysis, the downward revision “primarily reflected a downward revision to consumer spending.”
Link to the BEA Second GDP Estimate
The closely watched price indices also showed weaknesses:
- PCE price index was adjusted from 3.4% to 3.3%
- Core PCE price index was revised down from 3.7% to 3.6%
Here’s a snapshot of the report’s revisions:
Meanwhile, a separate report showed the initial jobless claims rising from 3K to 219K in the week ending May 25, which contributed to the four-week moving average increasing by 2.5K to 222,500.
Market Reactions
U.S. dollar vs. Major Currencies: 5-min
Overlay of USD vs. Major Currencies Chart by TradingView
The U.S. dollar started losing ground during late Asian session/early European session but saw a fresh swing lower at the report’s release.
See, the report questioned the perceived resilience of the economy and increased the odds that we may see a rate cut either in September, October, or November,
The Greenback weakened across the board and made new intraday lows against its major counterparts before trading sideways and seeing slight pullbacks a few hours after the report’s release and until the end of the day.
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