Atlanta Fed: "US Q1 GDP Growth Rate 2.8%"... Revised Up by 0.5%P

Real Personal Consumption Expenditure Expected to Increase by 3.2%

The Federal Reserve Bank of Atlanta raised its forecast for the real Gross Domestic Product (GDP) growth rate for the first quarter of this year. Strong consumer spending and a recovery in the manufacturing sector signaled once again that the U.S. economy is more resilient than expected.

According to the Atlanta Fed's 'GDP Now' on the 1st (local time), the real GDP growth rate for the first quarter of this year was projected at 2.8%.

The Atlanta Fed provides real-time forecasts of U.S. GDP growth rates through its GDP Now prediction model. On the 29th of last month, it had forecasted a 2.3% growth rate for Q1, but raised it by 0.5 percentage points in just three days. The real personal consumption expenditures growth rate for Q1 was revised up to 3.2%, and the real total private domestic investment growth rate was raised to 3.9%, up 0.6 and 0.8 percentage points respectively from previous estimates.

Although GDP Now is not the official forecast of the Atlanta Fed, it is used as a reference for future economic trends. The next GDP Now update is scheduled for the 4th.

The manufacturing indicators released on the same day also suggested that the U.S. economy is stronger than expected.

The Institute for Supply Management (ISM) reported that the U.S. manufacturing Purchasing Managers' Index (PMI) for March stood at 50.3. This marks the first time in one year and six months, since September 2022, that the U.S. manufacturing PMI compiled by ISM has entered expansion territory. This was driven by increases in production and new orders.

As the U.S. economy is confirmed to be more resilient than expected, expectations for a rate cut have receded, causing a sharp rise in Treasury yields.