No surprises in the final read: a contraction of 0.2% (annualized) in the US economy output. The deflator is at -0.1% and core PCE at +0.8%. It is important to remember that we are already towards the end of Q2, so this is old news. In addition, significant revisions are expected in late July.
The dollar is stable after the publication, with minor gains against some currencies.
Among the details, personal consumption was upgraded to 2.1% from 1.9% previously reported. Consumption is critical to the US economy. That is a positive. However, another contribution to the better read came from inventories. And what comes up must come down in inventories: replenishing is followed by depletion.
The third and officially the final read for Q1 GDP was expected to show an annualized contraction of 0.2%, better than -0.7% seen in the second read but still worse than a growth rate of 0.2% in the first read.
Before the deal, the dollar held its higher ground against its peers.
The GDP deflation was predicted to drop by 0.1%, no change from the previous read. Core PCE carried expectations of +0.8%, also unchanged.
