U.S. Economy Expands to 0.5% Pace, Weakest in 2 Years!
The U.S. economy expanded in the first quarter at the slowest pace in two years as American consumers reined in spending and companies tightened their belts in response to weak global financial conditions and a plunge in oil prices.
Gross domestic product rose at a 0.5 percent annualized rate after a 1.4 percent fourth-quarter advance, Commerce Department data showed Thursday. The increase was less than the 0.7 percent median projection in a Bloomberg survey and marked the third straight disappointing start to a year.
* Business investment slumps most in since second quarter 2009 *
Jobless claims last week hovered around four-decade lows, showing the labor market remains the strongest part of the U.S. economy.
Initial applications for unemployment benefits climbed by 9,000 to 257,000 in the week ended April 23, a report from the Labor Department showed Thursday in Washington. The prior week’s revised 248,000 claims were the fewest since 1973.
Yen soars, stocks slump as BOJ holds policy, pushes back inflation target
The Bank of Japan held off from expanding monetary stimulus on Thursday, defying market expectations for action even as soft global demand, an unwelcome rise in the yen and weak consumption threatened to derail a fragile economic recovery.
The yen surged the most against the dollar and the euro in nearly six years as the decision caught investors off guard, while the Nikkei share average sank 3.6 percent.
Oil prices continued to rally Thursday as the U.S. dollar depreciated against other currencies, making the dollar-priced crude less expensive and more attractive for buyers holding other currencies.
The BOJ on Thursday decided to keep its current monetary policy despite market expectations of additional easing, while again putting off the target date of achieving its 2 percent inflation goal. The U.S. dollar plunged about 3 percent against Japanese yen following the news.
The dollar index, which measures the greenback against six major peers, was down 0.67 percent at 93.759 in late trading.
Meanwhile, U.S. crude output decreased for a seventh week to the lowest level since October 2014, according to a report released by the Energy Information Administration Wednesday.
The West Texas Intermediate for June delivery added 70 cents to settle at 46.03 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude for June delivery increased 96 cents to close at 48.14 dollars a barrel on the London ICE Futures Exchange.
Reference: Bloomberg, Reuters, China.org
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