The U.S. economy
likely contracted in the first quarter as it buckled under the weight of
unusually heavy snowfalls and a resurgent dollar, but activity since
has rebounded modestly.
The
government is expected to report on Friday that gross domestic product
shrank at a 0.8 percent annual rate instead of growing at the 0.2
percent pace it estimated last month, according to a Reuters survey of
economists.
A larger trade deficit and a smaller accumulation of inventories by businesses than previously thought will probably account for much of the expected downward revision.
With growth estimates so far for the second quarter around 2 percent, the economy appears poised for its worst first half performance since 2011.
Economists, however, caution against reading too much into the expected slump in output. They argue the GDP figure for the first quarter was held down by a confluence of temporary factors, including a problem with the model the government uses to smooth the data for seasonal fluctuations.
"The weakness in the U.S. recovery is not like a cart losing its wheels because the labor market remains healthy and housing activity is picking up," said Thomas Costerg, a U.S. economist at Standard Chartered Bank in New York.
Several economists, including those at the San Francisco Federal Reserve Bank, have cast doubts on the accuracy of GDP estimates for the first quarter, which have tended to show weakness over the last several years.
They argued the so-called seasonal adjustment is not fully stripping out seasonal patterns, leaving "residual" seasonality. The government said last week it was aware of the potential problem and was working to minimize it.The Commerce Department will publish its first-quarter GDP revision on Friday at 8:30 a.m.
 |
| Containers await departure as crews load and unload consumer products at the Port of New Orleans along the Mississippi River in New Orleans, Louisiana June 23, 2010. |
A larger trade deficit and a smaller accumulation of inventories by businesses than previously thought will probably account for much of the expected downward revision.
With growth estimates so far for the second quarter around 2 percent, the economy appears poised for its worst first half performance since 2011.
Economists, however, caution against reading too much into the expected slump in output. They argue the GDP figure for the first quarter was held down by a confluence of temporary factors, including a problem with the model the government uses to smooth the data for seasonal fluctuations.
"The weakness in the U.S. recovery is not like a cart losing its wheels because the labor market remains healthy and housing activity is picking up," said Thomas Costerg, a U.S. economist at Standard Chartered Bank in New York.
Several economists, including those at the San Francisco Federal Reserve Bank, have cast doubts on the accuracy of GDP estimates for the first quarter, which have tended to show weakness over the last several years.
They argued the so-called seasonal adjustment is not fully stripping out seasonal patterns, leaving "residual" seasonality. The government said last week it was aware of the potential problem and was working to minimize it.The Commerce Department will publish its first-quarter GDP revision on Friday at 8:30 a.m.
No comments:
Post a Comment