AGL 39.58 Decreased By ▼ -0.42 (-1.05%)
AIRLINK 131.22 Increased By ▲ 2.16 (1.67%)
BOP 6.81 Increased By ▲ 0.06 (0.89%)
CNERGY 4.71 Increased By ▲ 0.22 (4.9%)
DCL 8.44 Decreased By ▼ -0.11 (-1.29%)
DFML 41.47 Increased By ▲ 0.65 (1.59%)
DGKC 82.09 Increased By ▲ 1.13 (1.4%)
FCCL 33.10 Increased By ▲ 0.33 (1.01%)
FFBL 72.87 Decreased By ▼ -1.56 (-2.1%)
FFL 12.26 Increased By ▲ 0.52 (4.43%)
HUBC 110.74 Increased By ▲ 1.16 (1.06%)
HUMNL 14.51 Increased By ▲ 0.76 (5.53%)
KEL 5.19 Decreased By ▼ -0.12 (-2.26%)
KOSM 7.61 Decreased By ▼ -0.11 (-1.42%)
MLCF 38.90 Increased By ▲ 0.30 (0.78%)
NBP 64.01 Increased By ▲ 0.50 (0.79%)
OGDC 192.82 Decreased By ▼ -1.87 (-0.96%)
PAEL 25.68 Decreased By ▼ -0.03 (-0.12%)
PIBTL 7.34 Decreased By ▼ -0.05 (-0.68%)
PPL 154.07 Decreased By ▼ -1.38 (-0.89%)
PRL 25.83 Increased By ▲ 0.04 (0.16%)
PTC 17.81 Increased By ▲ 0.31 (1.77%)
SEARL 82.30 Increased By ▲ 3.65 (4.64%)
TELE 7.76 Decreased By ▼ -0.10 (-1.27%)
TOMCL 33.46 Decreased By ▼ -0.27 (-0.8%)
TPLP 8.49 Increased By ▲ 0.09 (1.07%)
TREET 16.62 Increased By ▲ 0.35 (2.15%)
TRG 57.40 Decreased By ▼ -0.82 (-1.41%)
UNITY 27.51 Increased By ▲ 0.02 (0.07%)
WTL 1.37 Decreased By ▼ -0.02 (-1.44%)
BR100 10,504 Increased By 59.3 (0.57%)
BR30 31,226 Increased By 36.9 (0.12%)
KSE100 98,080 Increased By 281.6 (0.29%)
KSE30 30,559 Increased By 78 (0.26%)

The US economy grew at a 0.7 percent annual pace in the first three months of this year, the weakest in more than four years, but a closely watched inflation gauge unexpectedly accelerated, data showed on Thursday.
It was the weakest quarterly expansion in gross domestic product, or GDP, since the fourth quarter of 2002. The slowdown came as businesses sold off inventories even though consumer spending remained strong.
However, a key inflation gauge favoured by the Federal Reserve, the personal consumption expenditures price index excluding volatile food and energy prices, showed price pressures were stronger than expected.
Investors are expecting the Fed to maintain a hawkish tone on inflation when it announces its interest rate verdict at the end of a two-day policy meeting at about 2:15 pm (1815 GMT). US stock and bond prices were little changed as investors awaited the Fed decision.
"The higher inflation is what folks are focusing on. It's a little disconcerting," said Mark Vitner, economist at Wachovia Securities in Charlotte, North Carolina.
A separate report out of the Labour Department showed stable labour market conditions as the number of US workers lining up for jobless benefits fell by 13,000 last week to a seasonally adjusted 313,000.
That level was slightly lower than what Wall Street economists were expecting and was taken as a sign the labour market is still strong. But layoffs linked to auto retooling shutdowns typical in the summer months could skew the labour picture in coming weeks, economists said.
"We won't have a clear idea of any change in the trend in claims until the end of July," said Ian Shepherdson, chief US Economist at High Frequency Economics in Valhalla, New York.
"For now, though, the message seems to be that while companies have clearly cut back the pace of hiring, they are not significantly increasing layoffs," he added.
The GDP report, the final of three estimates, was slightly better than the government's earlier reading of 0.6 percent growth during the first quarter but a tad weaker than the 0.8 percent growth economists were expecting.
Businesses cut inventories at a $4.2 billion annual rate during the quarter, the department said, slightly less than the $4.5 billion annual rate in the previous estimate for the quarter but still big enough to pull growth down during the quarter.
Imports increased at a 5.5 percent rate during the quarter, slightly lower than the 5.7 percent estimate a month ago, but still a big enough rise to also help slow the GDP growth rate. At the same time, exports advanced at a 0.7 percent rate, a reversal from the 0.6 percent contraction in the previous estimate.
In the report, personal consumption spending, which fuels two-thirds of national economic activity rose at a 4.2 percent rate, slightly lower than the 4.4 percent rate estimated a month ago but still a strong underpinning to keep the economy growing.
The core PCE price index was revised up during the quarter to a 2.4 percent rate from the prior 2.2 percent estimate. Economists were expecting the core PCE to remain at 2.2 percent.
"We know that inflation was up because of the higher energy prices, but most of the recent data on core inflation was decelerating. Housing makes up a big chunk of that and obviously housing is in oversupply," said Vitner.

Copyright Reuters, 2007

Comments

Comments are closed.