US GDP – Q1 2012

US GDP grew by 0.5% (or 2.2% annualized) in the March quarter, confirming that the US economy is growing at […]

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  • US GDP grew by 0.5% (or 2.2% annualized) in the March quarter, confirming that the US economy is growing at a modest-to-moderate pace.
  • There was mixed news on the composition of GDP with inventories making a further contribution to growth and business investment declining. However, consumption and housing investment were strong and there was a small improvement in net exports.
  • We have left our forecasts for US growth unchanged at 2.3% in 2012 and 3.1% in 2013. In 2012, we expect GDP in the current quarter to grow at a similar rate to the March quarter and then strengthen in the second half of the year.
  • Implications for monetary policy broadly neutral. Recent FOMC economic projections signalled a reduced chance of further monetary policy but a key will be labour market performance in the months ahead.

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