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.

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