2016.04.2509:59:00UTC+00Us Economy Probably Lost Momentum in the First Quarter of 2016

US advance GDP data for Q1 is scheduled for release on 28th Thursday and expectations are that the US economy probably lost momentum in the first quarter of 2016. Weakness has been seen in several sectors, led by trade but also including retail sales, inventories and manufacturing.

Poor wholesale inventories data released earlier in the month lowered economists expectations for first-quarter Gross Domestic Product (GDP). Wholesale inventories fell by a more-than-expected 0.5%, biggest m/m drop in nearly three years. The part of inventories that feeds directly into the GDP, which counts stock excluding autos, fell 0.4%.

U.S. retail sales declined 0.3% m/m in March as consumers remain cautious and are yet to post an increase in 2016 amid slow wage gains and troubles overseas. Retail sales are a key barometer for overall consumer spending, which accounts for about two-thirds of economic output in the U.S.

More economists are forecasting that the US economy nearly shrank in the first quarter. JP Morgan lowered estimate for Q1 GDP to 0.2%, Barclays lowered its forecast to 0.3% from 0.4%, and Goldman cut its estimate to 0.9% from 1.2%.

"We suspect that underlying growth has slowed to a degree, but we believe that the expansion remains on track and that growth will pick up to approximately two percent over the balance of the year." said Daiwa Capital Markets in a report.