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The last quarter of 2015 sees US economic growth increase

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The latest official figures indicate that the US Economic Growth rose at a faster rate in the fourth quarter of 2015 than it was previously thought.

The pace of the growth was 1% annually in the last quarter compared to the earlier pace of 0.7%.

Many economists had predicted that the figure would go further down.

The advantageous factor was that businesses purchased extra stock than it was earlier on predicted thus increasing the inventory levels by $13Bn.

On the other side of the coin, the growth of next month is predicted that it will be lower in case businesses will not reduce the inventory spending.

There are some forecasts that have estimated that the 2016 US Economic growth rate will be as high as 2.5%.

Uncertainty

The spending by consumers contributes to over two-thirds of the US economic growth. This went up at a pace of 2% in the 4th quarter, which was lower than the earlier predicted rate of 2.2.

The consumer confidence has been boosted by cheap oil as well as low heating bills due to the mild winter.

Some economists are frightened that as the consumer spending goes down, things may get worse.

Some uncertainties that also hold are the upcoming US elections, the global economic situation and financial market volatility. There is also the possibility of the interest rates going up.

Janet Yellen, the chair of the Federal Reserve (US central bank), has made indications that interest rates may rise gradually through the year as the economy becomes stronger.

Some economists hold the belief that the US economy growth might be slowed by the reducing economic growth in countries all over the world such as China and Brazil. This may in turn make the raw materials prices to be lower and thus causing deflation.

For instance, the oil companies have not made much profit due to the lower oil prices which has made them to reduce on how much they spend.

A survey done by Reuters this month estimated that the leading 30 oil firms in the world reduced their budget by an average of 40%.

The post The last quarter of 2015 sees US Economic Growth Increase appeared first on International inside.



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The last quarter of 2015 sees US economic growth increase

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