U.S GDP Q1 2013 Rose by 2.5%

The bureau of economic analysis published today April 26th its first estimate of the growth rate of the U.S. Gross Domestic Product for Q1 2013. Based on the recent report, U.S output of goods and services growth rate rose by an annual rate of 2.5% in Q1 2013 – this result is lower than what many economist had predicted. This growth rate is still much better result than the growth rate recorded in the fourth quarter of 2012, in which the GDP grew by 0.4%. This lower than expected growth in GDP is related to the 8.4% drop in real federal government consumption expenditures. This news is likely to drag down commodities and equities down today.

Based to the latest update, the real U.S GDP in the first quarter of 2013 (first estimate) expanded by an annual rate of 2.5%. In the fourth quarter GDP grew by 0.4%; in the third quarter the GDP grew by 1.3%; in the same quarter in 2012 the GDP rose by 2%. Despite the rise in the growth rate in the first quarter of 2013. Many predicted the GDP will rise by roughly 3% in annual terms. Therefore, this positive news is likely to drag down the financial markets including commodities and equities.

This lower than anticipated growth in GDP in the first quarter of 2013 is mainly due to the drop in government spending including an 11.5% fall in national defense spending.

The chart below presents the developments of the real U.S. GDP (in annual rates) growth rate between 2009 and 2013.  As seen, the recent real GDP growth rate in the first quarter was the highest rate since the third quarter in 2012.

U.S. GDP update 2009-2012 US GDP (percent) April 2013Currently, the U.S stock markets are slightly falling; some major commodities are trading down: major energy commodities prices including crude oil prices are currently sharply falling; gold and silver are trading down; the U.S dollar is falling against several currencies including Euro and Japanese yen.

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