Q1 Growth Rate Revised Upward from 1.4% to 1.6%
New Unemployment Claims at 218,000...Below Expectations
The U.S. economy grew by 3% in the second quarter compared to the previous quarter. It is analyzed that the U.S. economy continues a solid growth trend based on strong consumer spending.
On the 26th (local time), the U.S. Department of Commerce announced that the final figure for real Gross Domestic Product (GDP) growth in the second quarter of this year was 3% annualized compared to the previous quarter.
This matches the preliminary figure announced last month and meets expectations. It is about double the first quarter's growth rate (1.6%) and far exceeds the U.S. potential growth rate, estimated to be in the high 1% range. The U.S. releases GDP growth rates in three stages: advance estimate, preliminary estimate, and final estimate.
The Department of Commerce explained, "Compared to the preliminary estimate, private inventory investment and federal spending were revised upward, while nonresidential fixed investment and exports were revised downward."
Contrary to concerns that household consumption spending would decline, the U.S. economy maintained solid growth in the second quarter based on strong consumer spending.
Additionally, the Department of Commerce revised the first quarter growth rate upward by 0.2 percentage points from the previously announced 1.4% to 1.6%. Although private inventory investment and residential fixed investment were revised downward, personal consumption was revised upward.
The U.S. labor market remained robust. According to the U.S. Department of Labor on the same day, initial jobless claims for the week of September 15?21 totaled 218,000. This is 40,000 fewer than the revised figure of 222,000 for the previous week and also below the expert forecast of 224,000. Continuing jobless claims, which count those claiming benefits for at least two consecutive weeks, were 1,834,000 for the week of September 8?14. This figure was below both the revised previous week's figure of 1,821,000 and the market expectation of 1,828,000.
Chris Larkin, Head of Trading and Investment at Morgan Stanley eTrade, said, "Even if there are problems in the labor market, they may not show up in weekly jobless claims, and as always, the monthly jobs report will play a major role in market sentiment." He added, "However, until contrary evidence emerges, these (jobless claims) figures will maintain hopes for a soft landing."
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