Breaking: US economy grows at an annual rate of 2.9% in Q4 vs. 2.6% expected

Annualized GDP in the US expanded at an annual rate of 2.9% in Q4.

The US Dollar gathers strength against its rivals with the initial reaction.

The benchmark 10-year US Treasury bond yield is up more than 1% on the day above 3.5%.

FXStreet Team FXStreet

The US economy expanded at an annualized rate of 2.9% in the fourth quarter, the US Bureau of Economic Analysis' (BEA) first estimate showed on Thursday.

This reading followed the 3.2% growth recorded in the third quarter and came in slightly better than the market expectation for an expansion of 2.6%.

"The increase in real GDP reflected increases in private inventory investment, consumer spending, federal government spending, state and local government spending, and nonresidential fixed investment that were partly offset by decreases in residential fixed investment and exports," the BEA explained in its publication. "Imports, which are a subtraction in the calculation of GDP, decreased."

Market reaction

With the initial market reaction, the US Dollar gathered strength against its rivals and the US Dollar Index turned positive on the day near 102.00. Additionally, the benchmark 10-year US Treasury bond yield extended its daily rebound and was last seen rising nearly 2% on the day at 3.51%.

Related content

Stay updated on the latest US GDP data by visiting our economic calendar event page.

To understand more about GDP and its impact on the economy, visit our macroeconomics topic page.

For latest developments on this GDP print release check out our latest news page.

About US Gross Domestic Product

The Gross Domestic Product Annualized released by the US Bureau of Economic Analysis shows the monetary value of all the goods, services and structures produced within a country in a given period of time. GDP Annualized is a gross measure of market activity because it indicates the pace at which a country's economy is growing or decreasing. Generally speaking, a high reading or a better than expected number is seen as positive for equities, while a low reading is negative.

Author

FXStreet Team
FXStreet

Composed of a group of economic journalists and FX experts, the FXStreet content team produces and oversees all content published on FXStreet. It provides a purely journalistic approach to the Forex market.

More from FXStreet Team

Share:

AUD/USD edges higher as hot CPI inflation and hawkish RBA lift rate hike bets

The AUD/USD pair gathers strength to near 0.7035 during the Asian trading hours on Friday. The Australian Dollar edges higher against the US Dollar as hotter Australian CPI inflation data has bolstered expectations of Reserve Bank of Australia rate hikes.

Japanese Yen struggles to gather strength as BoJ maintains status quo

USD/JPY trades marginally lower on the day at around 157.50 after the Bank of Japan (BoJ) decided to leave monetary policy settings unchanged at the October meeting. In the post-meeting press conference, BoJ Governor Ueda reiterated that they will continue to raise the policy rate and adjust the degree of monetary easing in reponse to economic activity and prices.

Gold slides below $4,000 as Fed rate hike bets offset falling bond yields and weak USD

Gold attracts some follow-through selling for the second straight day and slides below the $4,000 psychological mark during the Asian session on Friday amid hawkish US Federal Reserve expectations. In fact, US macro data released on Thursday pointed to resilient economic growth and persistent price pressures, solidifying bets for an imminent rate hike in December. This is seen as undermining the non-yielding bullion.

The hawkish Fed can't lift the US Dollar anymore

About three more Federal Reserve hikes are already priced in, and the central banks behind the Euro, Pound, Yen and Loonie are raising rates or about to. That leaves the US Dollar Index with little to gain if the Fed keeps leaning toward higher rates.

Binance hack shakes crypto, but XRP pullback may not be so bearish

Crypto markets were hit by a big headline overnight. Binance confirmed a security incident in which a compromised engineer's laptop led to unauthorized withdrawals, with an estimated impact of around $6.3 billion. About $3 billion has been frozen so far, Binance says it will cover the losses, and withdrawals were paused while security checks are completed.

A hot US economy is supposed to sink Gold. It didn't. Here's why

Gold (XAU/USD) remains under pressure near $4,000, as stronger-than-expected United States (US) economic data reinforce expectations of another Federal Reserve (Fed) interest rate hike in December. Economic growth is accelerating, inflation remains elevated, and borrowing costs could rise further.