Thursday preview: US GDP, Metlen Energy results in focus

(Sharecast News) - Thursday will be fairly quiet on the corporate front, with Metlen Energy's full-year results due in the UK. Across the pond, investors will eye the PCE index for February and fourth-quarter US GDP numbers, as well as the latest initial jobless claims.

As far as the PCE data is concerned, TD Securities said it expects inflation to have moderated slightly in February.

"Stronger prices will support a likely robust 0.7% month-on-month increase in personal spending," it said.

Michael Hewson at MCH Market Insights said we've come a long way from the back end of last year when some estimates of US Q4 GDP were coming in at the upper end of 3% after the US economy grew at 4.4% in Q3.

"These Q4 estimates always seemed a little fanciful given the US government shutdown that went on for several weeks, and which saw a raft of US consumers miss out on their SNAP (food stamps) payments," he said.

"The impact on the US labour market was also notable as was the effect on consumer spending, with estimates slowly getting revised down when preliminary numbers were released in February, coming in at 1.4%. This was revised lower again in the middle of March to 0.7%, while core inflation was revised upwards to 3.1%. The sharp downward revision to GDP came about due to adjustments on consumer, as well as government spending, as well as exports. There was also a slowdown in healthcare spending.

"This slowdown is likely to be a warning sign that while the US economy was growing at the end of last year, the spillover from the government shutdown, could well run into Q1, as sharp increase in energy costs also weigh on the US economy towards the back end of Q1. It will also complicate the picture for the Federal Reserve when it comes to the next move on interest rates, especially with core inflation still above 3%, and an economy that could well slow further."