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Friday, June 21, 2024

GDP Growth Lower & Positive Labor Market Led the S&P Lower

Key Takeaways:

  • The GDP growth rate for the first quarter of 2024 came in at 1.6%, lower than the consensus estimate of 2.5% and a significant decrease from the previous quarter’s 3.4%.
  • The mixed economic data led the S&P 500 0.46% lower as more jobs could lead to higher inflation.
  • While slower economic growth could help ease inflationary pressures, the higher-than-expected GDP Price Index and the tight labor market suggest that inflation remains a concern.

GDP Growth and Jobless Claims

The United States economy continues to show mixed signals as the latest GDP and jobless claims data were released today. The GDP growth rate for the first quarter of 2024 came in at 1.6%, lower than the consensus estimate of 2.5% and a significant decrease from the previous quarter’s 3.4%. This slowdown in economic growth could potentially ease inflationary pressures.

However, the GDP Price Index rose by 3.1% in the first quarter, slightly higher than the consensus estimate of 3% and a significant increase from the previous quarter’s 1.7%.

This new data comes as New Home Sales and Durable Goods Orders were released earlier this week, they were both above the consensus which could add to inflation.

The jobless claims data painted a more positive picture of the labor market. Initial jobless claims for the week ending April 20 came in at 207,000, lower than the consensus estimate of 214,000 and the previous week’s 212,000. The four-week average of initial claims also decreased to 213,250, indicating a stable and tight labor market. Continuing jobless claims for the week ending April 13 also fell to 1.781 million, lower than the consensus estimate of 1.814 million and the previous week’s 1.796 million.

The mixed economic data led the S&P 500 0.46% lower as more jobs could lead to higher inflation. This could lead to tighter monetary policy from the Federal Reserve.

While slower economic growth could help ease inflationary pressures, the higher-than-expected GDP Price Index and the tight labor market suggest that inflation remains a concern.

Lazarus
Lazarushttps://ljlnews.com
Publisher and editor of LJLNews. I am a Stock Market enthusiast, with an interest for politics. I hope you enjoy reading the articles! Contact me at: Lazaruslucas@ljlnews.com

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