US growth shows sharp in­crease

The Myanmar Times - - Business -

THE world’s largest econ­omy grew even faster than ini­tially thought in the third quar­ter, based in large part on a jump in spend­ing, the US Com­merce Depart­ment said.

Ac­cord­ing to a re­vised GDP re­port, the econ­omy grew at an an­nual rate of 3.2 per­cent, three-tenths higher than the ini­tial es­ti­mate pub­lished last month, which was al­ready the fastest rate in two years.

A con­sen­sus fore­cast had called for a more mod­est up­ward re­vi­sion to 3pc, from the 2.9pc ini­tial es­ti­mate. The re­sults showed an even more em­phatic up­swing at the start of the sec­ond half of 2016. Anaemic growth in the first half helped con­vince US mone­tary pol­i­cy­mak­ers to forego a planned course of in­ter­est rate hikes dur­ing the year.

How­ever, the US Fed­eral Re­serve is widely ex­pected to in­crease rates from their his­tor­i­cally-low levels when it meets next month.

Based on a more com­pre­hen­sive set of data, the re­vised GDP showed US con­sumers spent more on con­struc­tion for sin­gle-fam­ily hous­ing, while in­vest­ment in non-res­i­den­tial struc­tures was re­vised up­wards to 10.1pc from 5.4pc.

In a state­ment, the White House noted that eco­nomic con­di­tions abroad had not held back for­eign sales, but ac­knowl­edged some tem­po­rary fac­tors push­ing ex­ports.

“Ex­ports, which have faced sub­stan­tial head­winds in re­cent years from slow growth abroad, grew at an an­nual rate of 10.1 per­cent in the third quar­ter, boosted in part by tran­si­tory fac­tors,” said Ja­son Fur­man, chair of the Coun­cil of Eco­nomic Ad­vi­sors.

The data showed spend­ing on durable goods rose 2.8pc over the sec­ond quar­ter, 0.7 points more than pre­vi­ously es­ti­mated.

Sharp gains in con­sumer spend­ing on auto parts and re­tail sales in “other” non-durable goods, also boosted growth.

The con­sump­tion ex­pen­di­tures price in­dex was un­changed at 1.4pc.

Jim O’Sul­li­van of High Fre­quency Eco­nomics cau­tioned against putting too much con­fi­dence in the up­ward re­vi­sions, say­ing the strength of the econ­omy ap­peared “ex­ag­ger­ated”.

“We don’t think the un­der­ly­ing trend has sud­denly moved up sharply,” he said. “Still, there is cer­tainly no sign of weak­en­ing.”

Con­sumer con­fi­dence also re­bounded in Novem­ber, re­turn­ing to pre-re­ces­sion levels, driven by re­newed op­ti­mism in the eco­nomic out­look, the Con­fer­ence Board said.

The con­sumer con­fi­dence in­dex jumped nearly seven points to 107.1, well above the fore­cast. The in­dex stood at 111.9 in July 2007, prior to the out­break of the fi­nan­cial cri­sis.

Lynn Franco, di­rec­tor of eco­nomic in­di­ca­tors at the Con­fer­ence Board said, “A more favourable as­sess­ment of cur­rent con­di­tions cou­pled with a more op­ti­mistic short-term out­look helped boost con­fi­dence.”

Con­fi­dence in the present sit­u­a­tion jumped 7 points, and the expectations in­dex rose nearly 6 points.

Ms Franco said that while most con­sumers were sur­veyed be­fore the pres­i­den­tial elec­tion “it ap­pears from the small sam­ple of post­elec­tion re­sponses that con­sumers’ op­ti­mism was not im­pacted by the out­come”.

For the hol­i­day shop­ping sea­son “a more con­fi­dent con­sumer should be wel­come news for re­tail­ers”.

The view of cur­rent busi­ness con­di­tions showed a slight uptick with 29.2pc per­ceiv­ing con­di­tions as “good” com­pared to the prior month, and a de­cline in those who think the sit­u­a­tion is “bad”. –

Newspapers in English

Newspapers from Myanmar

© PressReader. All rights reserved.