New data showed US gross domestic product (GDP) grew 1.8pc year-on-year in the first quarter of 2010, down from the 3.1pc growth seen in the final quarter of 2010.
Analysts had been expecting growth to hold up better, at 2pc, but rising food and petrol prices dragged on consumer spending. Growth in personal consumption slowed to 2.7pc from 4pc.
The data came after the Federal Reserve downgraded its growth estimate for the whole year to 3.1pc to 3.3pc, from its January projection of 3.4pc to 3.9pc. The accompanying comments from Mr Bernanke had already sparked suspicions that growth slowed in the first quarter of the year, since he would have had access to the figures.
The new set of forecasts from the Federal Reserve also included higher projections for inflation, much of which has been driven by higher petrol prices. Climbing prices threaten growth as they squeeze households' and businesses' spending power.
In addition, applications for unemployment benefits jumped to 429,000 last week - well above the 392,000 in the Reuters consensus forecast.
Nonetheless, it was Mr Bernanke's dovish tone which was driving the movement in the dollar, said Barry O'Neill at broker Clear Currency. He saw the fundamental issue as the pace of the US recovery.
The growth data came a day after official figures showed that the UK economy grew 0.5pc in the first quarter of this year compared with the previous three months, in which it contracted by the same amount.
On an annual basis the growth was 1.8pc, but the figure is not directly comparable with US rate, which is seasonally adjusted. Investec analysts calculated that if US growth was presented in the same way as the headline UK figure, the quarter-on-quarter growth rate would be 0.4pc.
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