In the USA, new figures on economic development have been presented.
(Photo: Mercedes-Benz AG)
new York The US economy unexpectedly lost momentum in the first quarter. Gross domestic product increased by 1.1 percent from January to March, the Department of Commerce announced in Washington on Thursday. This fell short of the analysts’ consensus estimate of 2.0 percent. In the fourth quarter of 2022 there was still an increase of 2.6 percent.
Private consumer spending increased significantly by 3.7 percent, while exports even grew by 4.8 percent. On the other hand, investments by companies increased only slightly at 0.7 percent, while the construction industry weakened again in view of the rise in interest rates.
The figures were eagerly awaited. They show how much the recent rate hikes by the US Federal Reserve have affected the economy. Economists are currently at odds as to whether a recession is still looming in the US.
So far, a recession has been avoided thanks to the strong labor market and the continued buying mood of American consumers despite inflation. But in view of the recent banking crisis and the first layoffs, especially in the tech sector, the warning voices that the economy could perhaps still shrink are getting louder.
Economics professor Justin Wolfers from the University of Michigan is one of the optimists: “I’m not promising that there won’t be a recession,” he told the Handelsblatt. “But the really good news is that the first third of 2023 is already over. And so far the economy has picked up quite a bit.”
Definition: What is a recession?
Only on Wednesday did the figures on the US trade balance deficit bring rather positive news: According to them, the difference between exports and imports of goods fell by 8.4 percent in March to a four-month low of $84.6 billion. This was mainly due to higher US exports. Last spring, the foreign trade deficit in goods reached a record $125 billion.
>> Read here: “The direction is right”: US inflation rate continues to fall – but it is too early to give the all-clear
Basically, a lower trade deficit is good for GDP. However, analysts at Oxford Economics cautioned that most of the improvement depended on highly volatile factors such as oil prices. Imports, on the other hand, have declined, but mainly in the case of industrial products. This is a “sign that the business environment is slowing down,” they write.
More: The Fed faces a new balancing act