US eco­nomic growth re­vised up­ward

The Pak Banker - - MARKETS/SPORTS -

The US econ­omy grew at an an­nu­alised rate of 1.4% in the fourth quar­ter of 2015, ac­cord­ing to of­fi­cial fig­ures.

The US Com­merce Depart­ment re­vised its fourth quar­ter GDP to up­ward from an ini­tial es­ti­mate of 0.7%. Over­all, the US econ­omy is es­ti­mated to have grown at a rate of 2.4% for all of 2015. One rea­son for the re­vised fig­ure was greater con­sumer spend­ing than of­fi­cials ini­tially thought, boosted by an im­prov­ing labour mar­ket. An­a­lysts had ex­pected the fourth quar­ter growth rate to re­main un­changed from the last es­ti­mate of 1%.

"It's es­pe­cially good that we saw a boost in con­sump­tion, how­ever we are only talk­ing about 1.4% growth, which is still anaemic com­pared to the 3.5% we would like to see," said Dan North, chief econ­o­mist at Euler Her­mes North Amer­ica. "The econ­omy is still run­ning in low gear," he said.

In­creased em­ploy­ment has helped to slowly boost wages and hous­ing prices, while low oil prices have in­creased dis­cre­tionary spend­ing by US house­holds.

The stronger growth rate could in­crease the chances of an in­ter­est rate hike when the Fed­eral Re­serve meets in April. The cen­tral bank left rates un­changed at its meet­ing in March, say­ing the slow­ing global econ­omy raised risks for the US mar­ket. US cor­po­rate prof­its dipped 11.5% for the fourth quar­ter com­pared to the same Oc­to­ber through De­cem­ber pe­riod in the pre­vi­ous year. Com­pa­nies were hurt by low oil prices, with some in­dus­trial and petroleum linked com­pa­nies forced to cut their work­forces or file for bank­ruptcy. -

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