In what is likely to be a busy week on the political and economic fronts, investors and economists will learn how strong the U.S. economy is at the moment as well as how persistent inflation is becoming.
While the political world is focused on the opening remarks in former President Donald Trump’s criminal trial over hush money payments to a porn star and fallout from House Speaker Mike Johnson’s support for a Ukraine aid package, the main events on the economic front will be on Thursday with the first estimate of growth in the nation’s gross domestic product in the first quarter and a key inflation measure watched closely by the Federal Reserve,
Estimates for GDP growth are around 2.9% to 3.1%, following the fourth quarter’s 3.4% gain. Continued strong consumer and government spending are expected to have driven growth higher.
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“Real GDP growth likely slowed in the advance estimate for the first quarter after a 3.4% annualized increase in the fourth quarter of 2023,” Comerica Bank economists Bill Adams and Waran Bhahirethan wrote on Monday morning, “Residential investment likely pulled back in the first quarter, led by lower multifamily homebuilding.”
“Spending by consumers and by federal, state and local governments were likely tailwinds to growth,” they added. “Businesses’ investments in nonresidential fixed investment and inventories were likely tailwinds to real GDP in the quarter as well.”
Also on Thursday, the…
