The U.S. Department of Commerce raised sharply on Thursday, showing that U.S. economic growth in the first quarter was much stronger than previously expected.
Gross domestic product grew at a 2% annualized rate in the January-March period, above the previous forecast of 1.3% and above the Dow Jones consensus forecast of 1.4%. This is the third and final estimate of first-quarter GDP.
The upward revision helped dampen widespread expectations that the U.S. is heading for a recession.
The change was largely due to stronger consumer spending and exports than previously thought, according to a summary by the department’s Bureau of Economic Analysis.
There was also some good news on the inflation front.
Core personal consumption expenditures prices, which exclude food and energy, rose 4.9 percent over the period, down 0.1 percentage point. The historical price index rose 3.8%, unchanged from the previous forecast.
Fed policymakers watch core personal consumption expenditures most closely as a measure of inflation. Through a series of rate hikes, the Fed is trying to bring inflation back down to 2%.
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