US GDP Revised Up But Growth Lacklustre

Latest data paint a picture of somewhat lacklustre growth going into Q1 2016, even as the final release for Q4 2015 GDP growth was revised up. Instead of the 1.0% (q-o-q annualized) increase that was previously announced, the Q4 economy actually advanced by 1.4%. This was down from 2.0% in Q3, however, but in y-o-y terms activity managed to maintain a 2.1% pace in the second half of 2015. The Q4 national accounts also saw an upward revision to personal consumption growth, from 2.0% (q-o-q annualized) in the preliminary release to 2.4% (this, too, was still down from the previous quarter’s 3.0% outturn). On the downside, business investment was downgraded from -1.9% to -2.1% while pre-tax corporate profits were markedly weak, falling from an annualized -6.2% showing in Q3 to an even deeper -27.7% in Q4. Export-oriented industries have been hit by the strong US dollar against other currencies, while the sharp decline in commodity prices has hit the energy sector and prompted cutbacks in investment.

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