The world’s strongest economy continued to recover in the second quarter this year. But its pace was significantly lower than analysts” estimates had forecast. The dollar reacted to new GDP data by weakening.
While analysts’ consensus on growth in the United States gross domestic product was at 8.4 percent in the second quarter this year, the US economy ended up adding just 6.5 year-on-year percentages. Quarterly, the performance of the U.S. economy increased 1.6 percent. At the same time, U.S. authorities adjusted economic growth slightly downward for the first quarter.
Not all indicators have disappointed the market, though. U.S. economic growth was pulled in particular by household consumer spending, which increased 11.8 percent year-on-year, with analysts’ expectations 1.3 percentage points lower. Household consumption accelerated even interquartally when it rose by an equal six percent. That was just 2.7 percent in the first quarter.
However, the US economic growth data was disappointing for dollar market participants. The U.S. currency weakened 0.38 percent, bringing the dollar index to its lowest level in a month. But the dollar has been stronger against major currencies by 1.6 percent since the Federal Reserve’s June meeting.