U.S. economy underwhelms as rest of the world takes off: Citi data

FILE PHOTO: Shipping containers sit at the ports of Los Angeles and Long Beach

NEW YORK (Reuters) – The U.S. economy is plodding at a sub-par pace as the rest of the world appears to be gathering momentum, Citi Research’s barometers on surprise economic outcomes around the world showed on Friday.

The world’s biggest economy grew at a 0.7 percent annual pace in the first quarter, its slowest pace in three years, according to U.S. government data on Friday. This also fell short of an already modest 1.2 percent forecast among analysts polled by Reuters. (For an interactive on U.S. GDP, click http://tmsnrt.rs/1GsAlZi)

This knocked Citi’s gauge on U.S. economic data surprises <.CESIUSD> into negative territory for the first time since November. The gauge, which measures economic data that comes in weaker or stronger than economists’ forecasts and which traders monitor for the U.S. growth trajectory, fell to -4.8 from +4.1 on Thursday.

Back in mid-March this index reached 57.9, which was its strongest since January 2014, before declining on a string of disappointing U.S. data across nearly all sectors including jobs, consumer spending and business investments.

In contrast, consumer and business confidence have remained at multi-year highs on hopes of tax cuts, looser regulations and infrastructure spending from Washington led by U.S. President Donald Trump. (For a graphic on how U.S. stocks have fared under presidents since Eisenhower, click http://tmsnrt.rs/2ptKtwU)

While the United States struggles to run at a higher gear, European, Asian and emerging economies are showing evidence of faster activity, helped by stabilization in global oil and commodity prices. (For a graphic on currency and bonds, click http://tmsnrt.rs/2oTWDvY)

Citi’s economic surprise index on Europe <.CESIEUR> rose to 70.4, the highest since Feb. 28 as euro zone inflation rose by more than expected to the European Central Bank’s target and core inflation increased to its highest level in more than three years.

Citi’s economic surprise index on Asia <.CESIAPAC> hit 52.3 on Thursday, its highest since March 7, before receding a bit on Friday. Its index on emerging markets <.CESIEM> has rebounded from a three-month low it hit earlier April.

(This version of the story corrects corrects analysts’ median forecast to 1.2 percent, not 1.0 percent in second paragraph.)

(Reporting by Richard Leong; Editing by Chizu Nomiyama)