Wednesday, April 29, 2015
US Economic Growth Below Forecast
The US economy grew by only 0.2% in the last quarter. That is well below the 1% consensus forecast for the quarter. Exports declined, perhaps in response to the stronger dollar, and imports increased. The trade deficit reduced net GDP by 1.25%. Consumer spending, which accounts for around 70% of GDP was strong but business investment was below expectations. Decreasing investments in the energy industry, caused by falling prices, accounting for a large portion of the drop in business investment. Speculation has now turned to how the Fed may alter its plans in response to lower than expected growth.