US: GDP in first quarter contracts by 5% (third estimate) as expected

US' real GDP in first quarter declined by 5% on a quarterly basis.
US Dollar Index stays in the positive territory near 97.50 after the data.

Eren Sengezer FXStreet

The real Gross Domestic Product (GDP) in the US contracted by 5% in the first quarter of 2020, the US Bureau of Economic Analysis' (BEA) third estimate showed on Thursday. This reading matched the previous estimate and the market expectation.

"The decline in the first-quarter GDP reflected the response to the spread of COVID-19, as governments issued "stay-at-home" orders in March," the BEA explained in its publication. "This led to rapid changes in demand, as businesses and schools switched to remote work or cancelled operations, and consumers cancelled, restricted, or redirected their spending."

The BEA further noted that the full economic effects of the COVID-19 pandemic cannot be quantified in the GDP estimate for the first quarter of 2020 because the impacts are generally embedded in source data and cannot be separately identified.

Market reaction

This data doesn't seem to be having a significant impact on the greenback's performance. As of writing, the US Dollar Index was up 0.3% on the day at 97.50.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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