According to official data from the Commerce Department, the US economy is performing better than predicted in the first quarter of 2016.
Estimates for the nation’s GDP were around 0.8 percent annualized for the first quarter, while the actual figures were 1.2 percent.
Impressive export figures helped with the upward revision of the gross domestic product.
However, a downturn in spending for the heath sector and diminished consumer spending was reflected in a revision down for overall growth in consumer spending to 1.5 percent, its worst performance for two years.
This is the third effort by the Commerce Department to forecast Q1 GDP. Last year they also took a few revisions before settling on a confident figure.
Although the recent data is seen by most as a very positive indicator for the world’s largest economy, there is also a general air of concern that the UK’s shocking Brexit vote could send a negative ripple effect through the domestic financial landscape, slowing growth in the second quarter.
Michael Lane, Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management commented on the reports in a phone interview, “We still expect Q2 growth this year to be up or around the 2.5 percent mark regardless of many investors bearish outlook following the British decision to leave the European Union.”
He added, “Consumers in America will, once again, be the dominant factor in the domestic economy. There have been reliable forecasts that personal consumption in the coming quarter will grow by over 3.5 percent.”
