Press Release (ePRNews.com) - TORONTO - Apr 28, 2016 - Valgard Investments
US Economic Update – GDP Growth Slows in 1st Quarter of 2016
Disappointing data on US GDP growth was released yesterday seeing the slowest growth in nearly 2 years.
The US economy grew by just 0.5% in Q1 of 2016. The data confirmed what many analysts believed yet still managed to surprise investors. The last quarter of 2015 saw 1.4% growth.
With less consumer spending and a strong USD affecting exports the data suggests a slowing economy however with the labor market performing strongly, signals are mixed and this may be why the Federal Reserve is still being so cautious.
Business investment was down to its lowest level since the financial crisis in 2009, dropping 5.9% for the quarter. Oil and Gas exploration was significantly reduced as the price of oil earlier in the year saw a massive decline. The sector has been feeling the pinch since the beginning of the year and spending was down 86%.
Although Q1 performance came in under expectations, Q2 should be far better with analysts forecasting 1.9% growth against the 2.4% seen in 2015.
What this data does show is that the concerns about the global economy are trickling into the US markets and that the Fed has been right so far to hold off from another increase in interest rates. An increase is now looking ever more likely in September and possibly December.
Major US Index Closes 28th April:
S&P 500 2,075.81 (-0.92%)
Dow – 17,830.76 (-1.17%)
NASDAQ – 4,805.29 (-1.14%)
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