US GDP revised down sharply but markets stay firmer

The US economy grew far less than expected in the first quarter of 2012, the latest data has revealed, potentially putting pressure on the Federal Reserve to keep stimulus measures in place for longer.

The final reading of Q1 GDP showed the US economy grew by 1.8%, well below the previous estimate of 2.4%. The US Commerce Department, which supplied the figures, said a large downward revision down to household purchases hit the overall figure. Household purchases, which account for about 70% of the economy, were revised down from a 3.4% gain to a 2.6% gain. The data may cause Fed chairman Ben Bernanke to hold back on any plans to curtail QE in the US, a policy shift which has so far caused a major sell-off in markets since it was announced last month. Today, as news of the US' GDP...