Chart of the Week: February 2, 2016

Screen Shot 2016-02-02 at 4.35.58 PM

Real U.S. economic growth slowed to an annualized rate of 0.7% in 4Q15, but with consensus estimates of 0.8%, this report did not come as a surprise to markets. Expectations leading up to the report were for slower growth due to the familiar headwinds of low commodity prices, an inventory overhang and a strong dollar. Each of these came to pass, as shown in the chart. Business investment, for example, detracted 0.2% from growth this quarter, as investment in mining and oil exploration structures decreased at an annualized rate of almost 40%. Strength in the report was similarly predictable, and although consumption slowed to an annualized pace of 2.2% last quarter, it still contributed 1.5% to growth, and residential investment proved to be a tailwind following an unusually mild start to the winter. In 2015, real GDP increased at an above-trend rate of 2.4%, matching economic growth in 2014. While there was some weakness in this quarter’s report, growth at an annual pace of 2.4% is consistent with our expectation for continued rate increases in 2016, and the details of this report highlight that the consumer is alive and well.

For more information please visit the Source below.

(Source: JPMorgan)

Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s