US GDP Tumbles to Negative 4.8% in Q1, USD near 2wks Low

WASHINGTON, D.C. (DTN) — Bureau of Economic Analysis this morning said U.S. real gross domestic product for the first quarter contracted 4.8%, according to their first of three estimates. The current estimate was below market expectations and compares with a 2.1% advance from the prior quarter.

“The decline in first quarter GDP was, in part, due to the response to the spread of COVID-19, as governments issued “stay-at-home” orders in March. This led to rapid changes in demand, as businesses and schools switched to remote work or canceled operations, and consumers canceled, restricted, or redirected their spending,” said BEA.

The Commerce department agency, however, highlighted that the full economic effects of the COVID-19 pandemic cannot be fully quantified in the first quarter because the impacts were partial.

Following the GDP release, U.S. dollar weakened to 99.760, closing in on Tuesday’s 99.485 two-week low, and West Texas Intermediate June futures advanced $2.20 to trade near $14.55 bbl.