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(Kitco News) The U.S. economy grew slightly more than expected in the first quarter, the U.S. Bureau of Economic Analysis reported on Thursday.
The second estimate showed that the U.S. Q1 GDP rose 1.3% versus markets’ expectations of a 1.1% increase. This comes after Q4 GDP came in at 2.6%.
“With the second estimate, upward revisions to private inventory investment, state and local government spending, nonresidential fixed investment, consumer spending, and exports were partly offset by a downward revision to residential fixed investment. Imports were revised up,” the report said.
On the inflation front, the PCE price index was at 4.2% in Q1 after coming in at 3.7% in Q4.
Core PCE, which strips out volatile food and energy prices and is the Federal Reserve’s preferred inflation measure, was upwardly revised to 5% in the second Q1 estimate after posting 4.4% in Q4.
Gold price saw a sharp drop following the data release. June Comex gold futures last traded at $1,940.70, down 1.22% on the day.
Despite the more robust data, the upward revision for Q1 does not change the longer-term trend, according to economists at Wells Fargo.
“Incoming data beyond Q1 show the economy continuing to grow, albeit at a sub-trend level,” the economists said Thursday. “Although we believe that the U.S. economy is not in a recession at present, we continue to believe that it is tracking toward a downturn later this year.”
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