WASHINGTON (Archyde.com) – U.S. consumer spending rose more than expected in April as household purchases of goods and services increased, while the rise in inflation slowed, potentially supporting economic growth in the second quarter amid growing fears of a recession. Consumer spending, which accounts for more than two-thirds of US economic activity, rose 0.9 percent last month. Data for March was revised upwards to show spending increasing 1.4 percent instead of 1.1 percent as previously reported. Consumers have increased their demand for new purchases of cars, clothing and recreational goods, as well as home furnishings and equipment. Demand for goods remains strong even with increased spending on services. Consumer spending on dining out, travel, housing and utilities has also increased. Economists polled by Archyde.com had expected consumer spending to rise 0.7 percent. Spending was buoyed by massive savings and a huge wage hike as companies scramble to fill 11.5 million jobs, a record number, by the end of March. The Fed’s tightening monetary policy approach, as it struggles to bring high inflation back to its 2% target, has raised fears of a recession, which has led to a sell-off in stocks and a surge in US Treasury yields and the dollar. .
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US economy
The baht today (13 May) weakened to a new 5-year low at 34.79. baht per dollar
written by Alexandra Hartman Editor-in-Chief
Ms. Kanchana Chokpaisarnsilp research executive Kasikorn Research Center revealed that bahtHit the weakest level in 5 years at 34.79 baht per dollar. before returning to close the domestic market at 34.76 baht per dollar It continued to weaken from yesterday’s close at 34.72 baht per dollar.
bybahtdepreciated while the dollar Appreciated amid the possibility of a tightening of the Fed’s monetary policy. In addition, the dollar There is also support as a safe-haven currency amid concerns over signs of a global economic slowdown.
for the frame movement ofbahtNext week is expected at 34.20-35.00 baht per US dollar.
While the important factors to be monitored are the GDP numbers for the quarter 1/65, the Ukrainian-Russia situation. and the direction of foreign capital
while numbersUS economyThe key findings include the New York and Philadelphia Fed manufacturing sector surveys. May housing market index Retail sales, industrial production The start of home construction and pre-owned home sales in April
The market is also waiting to track Japan’s 1Q12 GDP, April inflation figures. of England and Europe Set the LPR interest rate of the People’s Bank of China. and Chinese economic numbers for April such as industrial production, retail sales and the unemployment rate.
Gold futures rose more than $20, near $1,920 today. While investors are buying gold as a safe haven asset. Amid concerns regarding the US economy
At 7:15 p.m. Thai time, the COMEX (Commodity Exchange) gold contract will be delivered in June. It rebounded $26.40, or 1.39%, to $1,917.70 an ounce.
The U.S. Commerce Department released its first estimate for 1Q12 gross domestic product (GDP) showing that the U.S. economy contracted 1.4%, the first contraction since a recession hit by the fallout from the global recession. The spread of COVID-19 in early 2020
Analysts had previously forecast the economy expanding 1.1% in the 1Q12.
However, gold prices are likely to decline in April. by being affected by the dollar’s appreciation and the rebound in US government bond yields
A stronger dollar will reduce the attractiveness of gold. by making gold contracts more expensive for holders of other currencies As the rebound in US Treasury yields increases the opportunity cost of holding gold. Because gold is an asset that does not return in the form of interest.
Investors were also worried regarding the Federal Reserve’s accelerating interest rate hikes following Fed Chairman Jerome Powell said he encouraged the Fed to move faster to combat inflation. and indicated there was a chance the Fed would raise interest rates by 0.50% at its May meeting. This will be the first time the Fed has raised interest rates by 0.50% since 2000.
At the same time, markets are still worried that the Fed will raise interest rates more strongly following May. might be raised by 0.75% to curb inflation
Biden praises the performance of the US economy despite the sudden downturn
written by Alexandra Hartman Editor-in-Chief
US growth recorded an unexpected decline in the first quarter of the year, with the gross domestic product contracting by 1.4%, but the economy “remains strong”, as Joe Biden said, citing “technical” factors to explain this decline.
The rate of decline in the gross domestic product of the world’s largest economy is calculated on an annual basis. But compared to just the last quarter, the decline was 0.4%, according to Commerce Department data. This is while analysts expected a growth of 1.1%.
“The United States is facing the challenges of COVID-19 around the world, the unjustified invasion of Ukraine by Russian President Vladimir Putin, and global inflation,” the US president said in a statement.
Then he stressed during a press conference that he was “not concerned” regarding the risks of a recession, and highlighted the consumer spending of households and companies and the drop in the unemployment rate to the lowest level in history.
However, the first quarter represents a clear reversal of the trend compared to the annual growth rate of 6.9% recorded in the fourth quarter of 2021. This underperformance will greatly complicate the task of the US Central Bank, which was aggressively planning to raise interest rates, to curb inflation.
This quarter is the weakest since the spring of 2020, when the pandemic plunged the US economy into a deep recession.
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A failure in performance greatly complicates the task of the “reserve” to raise interest rates
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Between January and March, the world’s largest economy was affected by a wave of mutant omicron and persistent supply chain problems.
A few economists recently warned of the possibility of a short-term recession, pointing to a range of factors affecting the economy starting with inflation at a pace not seen since the early 1980s.
In the first quarter, consumer prices rose 6.3% year-on-year, according to the US central bank’s personal consumption expenditures inflation index published with gross domestic product Thursday.
However, it takes two consecutive quarters of GDP contraction for an economy to be considered a recession; So we will have to wait until the end of the second quarter to find out the answer.
In addition to inflation, companies face labor shortages due to mass retirements and millions quitting each month to get a better-paying job.
“strong at the moment”
At the same time, the Commerce Department reports a decrease in government aid, a decrease in exports (-5.9%) and public spending of the federal state (-5.9%), while imports increased by 17.7%.
The Russian-Ukrainian war, which began on February 24, has exacerbated problems in global supply chains and inflationary pressures.
However, most economists believe that the US economy is still strong thanks to strong consumption, which is the historical engine of US growth.
These expenses increased in the first quarter by 2.7%, compared to 2.5% in the fourth quarter of 2021.
“Weak on the surface but strong in substance,” Gregory Dacoe, chief economist at EY Parthenon, wrote on Twitter, taking care to add in parentheses: “For the time being.”
Lydia Bosor, an economist at Oxford Economics, commented, “The first contraction in GDP since the end of the recession is sure to fuel fears of a slowing economy, but the report is not as worrisome as it appears if carefully examined.”
But the outlook remains highly uncertain, with the war in Ukraine slowing growth in most countries of the world, and China’s policy continuing; The lack of tolerance for COVID-19 is exacerbating supply problems.
Attention now turns to the Central Bank, which meets on Tuesday and Wednesday. Chairman Jerome Powell said last week that the bank was considering raising key interest rates faster than expected.
“The positive trend in consumer spending and business investment” should encourage the Federal Reserve to move forward, said Rubella Farooqi, an economist at High Frequency Farooqui.
Joe Biden once more urged Congress to vote on his investment plans.
(AFP)