On April 29, the United States announced the initial value of GDP in the first quarter of 2022, with a ring on ring annual rate of - 1.4%, lower than the expected 1% and 6.9% lower than the previous value, recording another negative growth since the second quarter of 2020. After the data were released, the 10-year US bond interest rate and the US dollar index fell, and the three major indexes of US stocks opened higher.
The GDP ring of the United States in the first quarter of 2022 is relatively weak, but it is still high year-on-year.
The annualized rate was - 1.4% month on month. There is no doubt that the GDP of the United States in the first quarter of 2022 was lower than the market expectation. However, it should be noted that the year-on-year growth rate of GDP in the first quarter was still 3.57%, which means that the United States is still in an "overheating" state. In 2022, the real GDP of the United States in Q1 grew by 3.57% year-on-year. Due to huge financial subsidies, the real GDP of the United States in Q1 in 2021 was 6.3% month on month. Under the high base, the real GDP of the United States in Q1 in 2022 can still maintain more than 3.5% year-on-year, which means that the U.S. economy is still higher than the potential growth rate and in an overheated state.
The GDP of the United States in the first quarter was relatively weak, mainly dragged down by inventory and export.
In the first quarter of 2022, the growth rate of real GDP was 1.83% (1.76%) driven by household consumption (the previous value in parentheses), and 0.43% (5.82%) driven by private investment. Among them, the change of private inventory led to the growth rate of GDP - 0.84% (5.32%), export led to the growth rate of GDP - 0.68% (2.24%), import led to the growth rate of GDP - 2.53% (- 2.46%), and government expenditure led to the growth rate of GDP - 0.48% (- 0.46%).
Behind the destocking is the problem of the US supply chain, which shows that the US economy is still constrained by the supply chain. According to the US Bureau of economic analysis, the decline in private inventory was mainly dragged down by wholesale trade inventory and retail inventory. In the wholesale inventory, the drag item is mainly motor vehicle inventory; In the retail inventory, the drag items are mainly "other" retail inventory and motor vehicle dealer inventory. The lack of motor vehicle inventory is mainly related to supply chain problems.
The weak export of the United States in the first quarter is still related to the conflict between Russia and Ukraine and the epidemic in East Asia. US exports weakened in the first quarter, mainly dragged down by non durable goods (industrial raw materials, etc.). The main trading partners of the United States are the European Union, China, Japan and South Korea, which were affected by the conflict between Russia and Ukraine and the epidemic in the first quarter.
Although the U.S. GDP data in the first quarter was lower than expected, it will not hinder the Federal Reserve from raising interest rates quickly in the second quarter.
The actual situation of US GDP in the first quarter was good, but the month on month reading was lower than expected. US GDP is expected to improve in the second quarter. In terms of consumption, durable goods and services in the United States will be good. On the trend, residents' consumption will still shift from commodity consumption to services. The strong consumption of durable goods is mainly due to excess savings.
In terms of private investment, we saw considerable growth in equipment investment in the first quarter, while the U.S. job market is still booming. Driven by capital expenditure, we expect private inventories to rebound in the second quarter. On the other hand, the monthly data also shows that the actual inventory in the United States is still in the replenishment stage.
In terms of foreign trade, after entering the second quarter, the disturbance of the Russian Ukrainian conflict to US exports may be reduced. After the EU sanctions on Russian natural gas, the United States will increase LNG exports to the EU, which will improve the trade situation of the United States.
It should be noted that the epidemic situation in China in the second quarter is still disturbed, and it is expected that US exports to China will remain weak. We expect US exports to improve in the second quarter compared with the first quarter, but we should not be too optimistic.
At present, the Federal Reserve has made clear its policy attitude of "fighting inflation", which does not hesitate to suppress labor demand to suppress inflation. In addition, the US economy is still overheating, and the Fed may not change its pace of rapid interest rate hikes.
We expect the fed to raise interest rates by 50bps at its meetings in May and June, respectively. This means that the recent US debt and US dollar are still dominated by transaction tightening narrative. Therefore, after the data were released, the US bond interest rate and the US dollar fell only briefly, and then returned to the upward trend. At present, it is too early to worry about the US recession.
Risk tip: Overseas central banks raise interest rates faster than expected; Geopolitical risks; The risk of runaway inflation; The development of the epidemic exceeded the expected risk.
