① Initial claims in the United States: The number of first-time unemployment claims in the United States is expected to rise to 248,000 in the week ending April 22. As the labor market gradually cools, the number of initial unemployment claims is expected to continue to rise. After the recent seasonal adjustment, the number of initial unemployment claims has averaged around 240,000 in the past two months. However, due to the Easter holiday in the previous week, some initial claims may have been postponed to last week.
② U.S. first quarter GDP data: Compared with the 2.6% growth in the fourth quarter of last year, the real GDP in the first quarter is expected to show a moderate acceleration, recording 2.9%, which is stronger than the average growth rate of the past four quarters. As in the previous quarters, large fluctuations in net exports or inventory accumulation played an important role in the fluctuations of GDP. The beginning of 2023 is no exception, and actual domestic final sales are much stronger than in previous quarters.
The main components of real domestic final sales made positive contributions to growth last quarter, with real consumer spending up 5% year-on-year, one of the strongest quarters of consumption growth since the initial rebound from the epidemic. In addition, business fixed asset investment growth was also solid, and real equipment spending rebounded to a moderate level. On the negative side, residential construction continued to contract in the first quarter. The sector fell 4.5% year-on-year, but this was much slower than the double-digit contraction in the previous three quarters. At the same time, the trade deficit widened further, mainly due to a surge in imports. We believe that the impact of the widening trade deficit on GDP growth in the first quarter was 0.8%. The US GDP price index is expected to rise 3.5% year-on-year in the first quarter.
③ US Core PCE Price Index: Core PCE is expected to be another strong month in March, with a monthly rate of 0.3%, and the overall PCE monthly rate will rise modestly by 0.1%, while the core annual rate will remain stable at 4.6%. Consumer spending has been volatile in recent months, surging in January and weak in February. We expect a modest rebound in March data due to stable service industry spending, offsetting weak commodity sales.
④ U.S. Labor Cost Index (ECI): The labor cost index is forecast to rise by 1.1% quarter-on-quarter in the first quarter. Other indicators measuring employment cost growth have recently shown varying degrees of slowing signs, with average hourly wage growth slowing more than the Atlanta Fed's wage tracking indicator. We expect quarterly growth in the first quarter of 2023 to partially reverse the slowdown in the fourth quarter of 2022. Although allowance growth may cool further, wage growth will accelerate further this quarter, so we expect the ECI annual rate to decline to 4.7%, the first time it has fallen below 5% in a year.