U.S. second quarter GDP preview

Today, U.S. 2nd quarter GDP figure will be released at 12:30 GMT.

This is the first flash reading of the second-quarter GDP of the United States.  This would be a very vital piece of the economic docket to assess the health of the economy. This will be an indicator to see how the US economy is fairing especially with some recent signs of a slowdown.  

Past trends –

• U.S. GDP picked up pace since 2013 and increased the pace in 2014. However, after rising 5 percentage and 2.2 percentage in the previous two quarters, U.S. GDP shrank by -0.2 percentage in the first quarter of 2015. Historically speaking the U.S. economy usually falters in the first quarter.
• The second quarter was relatively better, with GDP growing at 2.1 percent in the second quarter from the first, only to slow down in the third quarter, with GDP growing about 1.3 percentage.
• Final quarter GDP was much better than expected at 1.4 percentage, still meager compared to 2014.
• GDP grew by 1.1 percent in the first quarter of 2016 and the second-quarter GDP grew by 1.4 percent and finished the year with 3.5 percent and 2.1 percent growth in the third and fourth quarter.
• In the first two quarters of 2017, GDP grew by 1.4 percent and by 3.1 percent. GDP grew by 3.2 percent in the third quarter.
• The growth has really picked up since 2018. See chart for details

Expectation today –

• GDP is expected at 1.8 percent y/y, which would be the weakest GDP growth since Q1 2017.
• According to the latest calculations, Atlanta Fed’s ‘GDP Now’ model has projected 1.3 percent growth for the second quarter.

Market impact –

If the actual number comes in line with the expectations, it would signal that the economy has weakened to some extent, especially after a stellar 3.1 percent growth in the first quarter.   

The dollar index is currently trading at 97.92, down 0.1 percent for the day, so far. The ongoing appreciation is likely to gain pace should the GDP outperforms.