"The consumer is still going to hold up. As we look toward the middle of the year, you have a consumer that continues to see aggregate income growth."
- RBC Capital Markets
American economy rose slightly less when compared with analysts' expectations in the last quarter of the previous year, mostly led by upbeat consumer spending which was the highest in eight years. GDP added 2.2% on the annual basis, according to the final reading published on Friday. Economists called for a 2.4% average gain after the preliminary data also showed a 2.2% increase. However, experts suggest the economy could grow better, but several negative factors weighed on exports and consumer spending during October-December period. Among them, US Dollar has been in a constant up-trend since the middle of last year, thus making American exports less attractive over the time, while imports has seen an opportunity to increase. As a result, trade balance of the country widened in Q4; however, it was partly offset by smaller energy imports as US oil production has been growing. In the meantime, consumer confidence declined marginally amid temporary worse than forecasted weather conditions this winter.
Nevertheless, analysts assume the US economy should regain momentum in the coming quarters. Jobs' growth remains strong and fewer Americans are applying for jobless benefits. Therefore, despite some weakness in foreign trade, economic expansion will most probably be driven both by domestic demand and climbing investment in 2015.
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