US: GDP revision, jobless claims and Powell

According to the 3rd reading data released today, the US GDP growth was revised upwards by 4.3% in 4Q20.

According to the 3rd reading data released today, the US GDP growth was revised upwards by 4.3% in 4Q20. While the annualized growth was 33.4% in 3Q20, GDP had announed as 4.1% in the 2nd (previous) reading of 4Q20. Increase in real GDP; reflecting mainly increases in exports, non-residential fixed investment, personal consumption expenditure (PCE), fixed housing investment and private inventory investment; partially offset by declines in state and local government spending, as well as federal government spending.

 

Applications for unemployment benefits fell to one-year lows with 684K in the week of March 20. Improved vaccination and reduced Covid-19 measures in some states seem to have enabled more Americans to return to the job market. Some sectors, of course, are still weaker due to the virus exposure and are recovering from behind. In the Fed's economic recovery baseline scenario, vaccination and financial incentives have already been given to the projections for the near term. As Powell reiterates today; Their views on bond yields are the same as they attribute this to an economic recovery rather than an inflationary risk… They are not worried and believe that the borrowing market will normalize soon.

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