US Treasury Officials: Overall economic strength belies weak GDP

“US Treasury officials said on Monday overall income and jobs figures suggested the economy was in good health and not in a recession, even if data due this week shows gross domestic product falling for a second consecutive quarter,” reported Reuters.

Key quotes

Ben Harris, Treasury assistant secretary for economic policy and Neil Mehrotra, deputy assistant secretary for macroeconomics, wrote that gross domestic income (GDI), which measures aggregate income -- wages, business profits, rental and interest income -- continued to rise in the first quarter at a 1.8% annual pace, while GDP fell.

They said while second quarter GDI data will not be available until the end of August, some GDI components, including employee compensation, proprietors income and rental income, show increases for the quarter. Tax receipts also suggest strong corporate income growth, the officials added.

Their comments came a day after U.S. Treasury Secretary Janet Yellen said a second quarter GDP contraction would not signal recession because of underlying job market strength, demand and other indicators of economic health.

FX implications

EUR/USD remains unfazed by the news as it takes rounds to 1.0220 after a sluggish start to the week.