US Q1 advance GDP +1.1% vs +2.0% expected

• Final Q4 reading was +2.6% annualized
• Q3 was +3.2% annualized

Details:

• Consumer spending +3.7% vs +1.0% prior
• Consumer spending on durables +16.9% vs -1.3% prior
• GDP final sales +3.4% vs +2.3% expected
• GDP deflator +4.0% vs +3.7% expected
• Core PCE +4.9% vs +4.7% expected (4.4% prior)
• Exports +4.8% vs -3.7% prior
• Imports +2.9% vs -4.4% prior
• Business investment +0.7% vs +4.0% prior

Percentage point changes:

• Net trade added 0.11 pp to GDP vs adding 0.46 pp in Q4
• Inventories cut 2.26 pp from GDP GDP Gross Domestic Product (GDP) is the monetary value of all the goods and services produced within a country's borders in a specific period of time, typically a year. It is used to measure the economic activity and growth of a country. Periods shorter than a year are often presented in an annualized or year-over-year format.There are three ways to calculate GDP:The expenditure approach: GDP is calculated by adding up all the spending on goods and services within a country. This includes consumer s Gross Domestic Product (GDP) is the monetary value of all the goods and services produced within a country's borders in a specific period of time, typically a year. It is used to measure the economic activity and growth of a country. Periods shorter than a year are often presented in an annualized or year-over-year format.There are three ways to calculate GDP:The expenditure approach: GDP is calculated by adding up all the spending on goods and services within a country. This includes consumer s Read this Term vs adding 1.46 pp in Q4
• Govt +0.81 pp vs +0.63 pp in Q4

There was a big drag from inventories here and we got a hint of that yesterday in the wholesale inventories report. The consensus was 2.0% but the later estimates, including the Atlanta Fed GDP number were lower so this isn't a huge surprise and that's why USD/JPY is stronger. Moreover, the consumer numbers are strong and that's positive going forward. Also helping to boost USD/JPY is the upside surprise in the inflation numbers, including core PCE.

USD/JPY is last at 133.90 compared to 133.40 before the report.