U.S. GDP statistics confirm that economic boom continues – Rapid increase in immigration is a tailwind – Preliminary figures – Bloomberg

The U.S. Department of Commerce’s Bureau of Economic Analysis (BEA) will release preliminary real GDP (gross domestic product) figures for the January-March period (first quarter) on the 25th, which are expected to confirm the continuation of the booming economy fueled by a surge in immigration. It will be done.

According to a survey conducted by Bloomberg, the median real GDP for the January-March period is expected to increase at an annual rate of 2.5% compared to the previous quarter, while individual consumers are expected to increase by 3%.

Although both forecasts indicate a slowdown from the October-December (fourth quarter) of last year, they mean that GDP growth will accelerate to the fastest pace in two years on a four-quarter basis. Economists are generally raising their GDP forecasts after the Congressional Budget Office (CBO) revised upward its estimates for the number of immigrants in a recent report.

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personal consumption

Personal consumption accounts for about two-thirds of GDP and may have continued to lead growth in the January-March quarter. Single-month data for January and February showed that spending on services was particularly strong, while spending on goods showed slower growth.

Economists including Anna Wong of Bloomberg Economics (BE) pointed out that “strong employment backed by an increase in labor supply supported aggregate income growth, which in turn boosted consumption.”

investment

It is thought that corporate capital investment has grown even more slowly. Meanwhile, the contribution of housing investment to GDP may be at its highest level since 2020, according to Goldman Sachs economist Spencer Hill.

Mortgage interest rates in the January-March period were on average about 0.5 points lower than in the October-December period of last year, which is thought to have led to an increase in sales of new and used homes.

government spending

Economists believe that government spending also contributed significantly to the GDP increase in the January-March period. One reason for this is the continued movement to restore spending at the state and local government level, which had cut back on spending due to the coronavirus pandemic.

Michael Reed, chief U.S. economist at RBC Capital Markets, said in a report on Tuesday that state and local governments continue to close spending gaps caused by the coronavirus, and that “government spending has fallen by 2 in terms of contribution to growth.” It is expected to become the second largest.”

Original title: US GDP Report Set to Highlight Immigration-Driven Economic Boom (excerpt)