US Q1 GDP revised to a fall..don’t panic!

Overnight the second estimate of first quarter GDP in the US came out weaker than had been expected at an annualised decline of 1% (revised from an increase of 0.1% and against expectations of a 0.5% fall). However, the fall was being slated to a poor weather in the early part of this year and a large reduction to the inventories estimate. As a result the US equity market shrugged off what might otherwise be seen as bad news and closed up 0.4%.
All the signs are that US GDP has recovered in Q2 so the markets do not expect this recent set-back to alter the Fed’s course of action; tapering is expected to continue.

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