US Q1 GDP Growth Falls Short of Expectations, Middle East War Impact Causes Inflation to Soar

Key News on US-Iran War

(Central News Agency, Washington, 30th, comprehensive foreign report) Newly released data shows that with cooling consumer spending, the U.S. first-quarter gross domestic product (GDP) growth rebound was lower than expected. At the same time, the impact of the Middle East war began to emerge, pushing up inflation significantly in the same month.

According to an AFP report, preliminary data released today by the U.S. Department of Commerce showed that the preliminary value of U.S. GDP for the first quarter (January to March) of this year, converted to an annualized rate, grew by 2%, lower than the market's estimated 2.2%, but higher than the 0.5% increase in the fourth quarter of last year.

The Commerce Department stated that while growth in government spending and investment drove GDP growth, it was partially offset by a slowdown in consumer spending.

In another report, the Commerce Department stated that the US-Iran war pushed up energy prices, causing a sharp rise in the core Personal Consumption Expenditures (PCE) price index, the inflation indicator favored by the Federal Reserve (Fed).

U.S. March PCE increased by 3.5% year-on-year, in line with market expectations, but the increase was significantly higher than the 2.8% in February.

Excluding volatile food and energy prices, core PCE increased by 0.3% month-on-month in March, and the year-on-year growth rate reached 3.2%, the highest level since November 2023.

After the United States and Israel launched airstrikes against Iran on February 28, triggering retaliation from Tehran and effectively blockading the Strait of Hormuz, global energy costs have since risen sharply.

According to data from the American Automobile Association (AAA), the average price of gasoline at U.S. gas stations has reached $4.30 per gallon (approximately 3.785 liters), or about NT$136. This could increase the burden on household living expenses before the U.S. midterm elections in November. (Compiler: Hung Chi-yuan) 1150430

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