- Gennadiy Goldberg, a U.S. rates strategist for TD Securities
The US economy grew at a slightly slower pace than initially expected in the third quarter. The nation's gross domestic product rose at a 2.0% seasonally adjusted annual rate in the three months through September, according to the Commerce Department, compared with initially estimated 2.1%. Economists, however, had expected a 1.9% expansion. The data suggests 2015 is on track to close out another year of steady growth, supported by an improving job market, robust home sales and pockets of wage increases. Nevertheless, headwinds remain: despite low gasoline prices, consumer spending has been muted throughout the year. Weakness in overseas economies, a strong US Dollar and low oil prices have weighed on the manufacturing, mining and energy sectors, damping business investment and exports and resulting in thousands of layoffs.
The median projection from Fed officials as of December was for the world's number one economy to grow 2.1% this year and 2.4% in 2016. Consumer spending, the US economy's driver, rose at an unrevised 3.0% annual rate, contributing 2.04 percentage points to the quarter's 2.0% growth rate. Household spending on services increased at a 2.1% pace, with health care outlays alone accounting for 0.4 percentage points of the quarter's GDP growth.
© Dukascopy Bank SA