Friday, 27 May 2011

US first quarter growth unchanged, stocks rise

US first quarter GDP growth was unchanged from the advance estimate. Bloomberg reports the latest numbers as well as other US economic data:

Consumer spending cooled in the first quarter more than previously estimated as the jump in food and fuel costs held back the biggest part of the U.S. economy.

Household purchases rose at a 2.2 percent annual pace from January through March, less than the 2.7 percent calculated last month and short of the 2.8 percent median forecast of economists surveyed by Bloomberg News, according to Commerce Department figures issued today in Washington. The economy grew at a 1.8 percent pace last quarter, the same as previously calculated...

The number of workers filing applications for unemployment insurance benefits increased by 10,000 to 424,000 in the week ended May 21, according to data from the Labor Department. The median forecast of economists surveyed by Bloomberg projected claims would decrease to 404,000...

A monthlong slide in consumer confidence ended last week as gasoline prices retreated, another report showed. The Bloomberg Consumer Comfort Index rose to minus 48.4 in the period to May 22 from a nine-month low of minus 49.4 the prior week. Readings of minus 40 or less are generally associated with recessions and their aftermaths, the report said...

Today’s report also offered a first look at profits. Earnings before taxes were up 1.3 percent from the prior quarter, the smallest gain in more than two years, after rising 2.3 percent in the prior period. They climbed 8.5 percent from the same time last year.

The smaller increase in corporate profits did not stop investors from pushing up stocks on Thursday. Again from Bloomberg:

U.S. stocks gained a second day as higher-than-estimated corporate profits at companies including Tiffany & Co. (TIF) overshadowed data showing the economy grew at a slower rate than forecast and jobless claims unexpectedly rose...

The Standard & Poor’s 500 Index advanced 0.4 percent to 1,325.69 at 4 p.m. in New York. The Dow Jones Industrial Average increased 8.10 points, or 0.1 percent, to 12,402.76. Both benchmark gauges yesterday snapped a three-day decline.

Stock gains came despite more worries over eurozone sovereign debt.

Earlier today, stocks extended declines after Luxembourg’s Jean-Claude Juncker, who leads the group of euro-area finance ministers, said the International Monetary Fund may not release its portion of a 12 billion-euro ($17 billion) aid payment to Greece next month.

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