The US economy returned to 2 percent growth in the first quarter, government data showed.
US gross domestic product expanded at an annualized rate of 2.0 percent in the first quarter, according to advance estimates released by the Commerce Department on Wednesday. The figure fell short of the 2.2 percent forecast compiled by Dow Jones. The US economy had slowed to 0.5 percent growth in the fourth quarter of last year, as consumer spending recovery stalled and industrial production posted only modest gains.
Employment indicators also showed strength. The Labor Department said the same day that initial jobless claims fell to 189,000 last week (April 19-25), down 26,000 from the prior week. It marked the first time in 57 years, since September 1969, that new jobless claims dropped below 190,000. The reading also came in well below the Dow Jones consensus estimate of 212,000.
Inflation, however, accelerated in earnest, driven by a surge in energy prices following the Iran war. The personal consumption expenditures (PCE) price index rose 3.5 percent in March from a year earlier, and 0.7 percent from the previous month. Both the year-on-year and month-on-month figures matched Dow Jones consensus estimates. Core PCE, which excludes energy and food, rose 3.2 percent year-on-year and 0.3 percent month-on-month, also in line with forecasts. The PCE price index measures the prices that US residents pay for goods and services.
