US economic growth for the first quarter of 2024 was revised down in the second estimate, with annual GDP now at just 1.3% when markets expected it to maintain its initial reading of 1.6%.
According to the Bureau of Economic Analysis, the downward revision “It primarily reflects a downward revision in consumer spending.“
Link to BEA's second GDP estimate
Closely monitored price indicators also showed weaknesses:
- The PCE price index was revised from 3.4% to 3.3%.
- The core PCE price index was revised down from 3.7% to 3.6%.
Here is a snapshot of the report's reviews:
Meanwhile, a separate report showed initial jobless claims rose from 3,000 to 219,000 in the week ending May 25, contributing to the four-week moving average increasing by 2.5,000 to 222,500.
Market reactions
US dollar against major currencies: 5 minutes
Overlay of the US dollar against major currencies Chart by TradingView
The US dollar began to lose ground during the late Asian/early European session but saw a new bearish swing upon the release of the report.
See, the report questioned the economy's perceived resilience and raised the odds that we might see a rate cut in either September, October or November.
The dollar weakened across all sectors and recorded new intraday lows against its major counterparts before trading sideways and witnessing slight declines a few hours after the report was issued until the end of the day.
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