US first-quarter GDP revised up to 2% on exports, consumers; jobless claims fall by most since 2021
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Data also showed that applications for US unemployment benefits fell last week by the most since October 2021.
PHOTO: BLOOMBERG
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NEW YORK – Advance estimates for the United States’ gross domestic product were revised upwards notably to 2 per cent in the first quarter, data showed on Thursday.
The Bureau of Economic Analysis’ updated GDP estimates reflected upward revisions to exports and consumer spending. Household spending, the engine of the US economy, rose at a 4.2 per cent pace – the strongest rate in nearly two years – as services outlays were adjusted higher.
Meanwhile, key gauges of inflation watched closely by the Federal Reserve were revised downwards slightly. The personal consumption expenditures price index excluding food and energy rose at a 4.9 per cent pace in the first quarter.
The government’s other main measure of economic activity, gross domestic income (GDI), painted a different picture. While improved from an earlier estimate, GDI fell at a 1.8 per cent pace in the first quarter, marking a second straight decline.
Averaging GDI and GDP, the economy grew just 0.1 per cent.
Data also showed that applications for US unemployment benefits fell last week by the most since October 2021 in a week that included the Juneteenth holiday.
Initial jobless claims decreased by 26,000 to 239,000 in the week ended June 24, according to the Labour Department’s Thursday report. The figure was lower than all estimates in a Bloomberg survey of economists.
Continuing claims, which include those who have received unemployment benefits for more than one week, dropped to 1.7 million for the week ended June 17.
Despite the drop in claims, demand for workers has been easing slowly as more than a year’s worth of interest-rate hikes from the Federal Reserve work their way through the economy.
Chairman Jerome Powell said this week that the labour market has been cooling in a way the central bank would have hoped, which, if sustained, could limit job losses down the line.
The claims data can be choppy from week to week, especially around holidays, and this period included the Juneteenth holiday. The four-week moving average in initial claims, which smooths out some of that volatility, ticked up to 257,500, still the highest since late 2021.
On an unadjusted basis, claims decreased to 233,048, led by California, which reversed a large jump from the prior period. Texas also saw a significant drop in applications. BLOOMBERG
