The U.S. economy is not as weak as recent data suggests, according to a Federal Reserve report that may pave the way for an interest rate hike this summer.
“The official estimate of real GDP growth for the first three months of 2015 was shockingly weak,” the San Francisco Fed said in a paper released Monday.
“Applying a second round of seasonal adjustment corrects this residual seasonality. After this correction, aggregate output grew much faster in the first quarter than reported.”
The Commerce Department said U.S. GDP inched up by just 0.2 percent in the first quarter following the 2.2 percent growth seen in the fourth quarter. The modest uptick compared to economist estimates for an increase of about 1.0 percent.
The paper’s authors found “a good chance that underlying economic growth so far this year was substantially stronger than reported.”
The material has been provided by InstaForex Company – www.instaforex.com