News

US GDP Growth Rate Disappoints in Q2
The US economy advanced an annualized 6.5% on quarter in Q2 2021, well below market forecasts of 8.5%, the advance estimate showed. Personal consumption expenditures grew 11.8% namely services (12%) and nondurable goods (12.6%) as vaccinated Americans travel and engage in activities that were restricted before. Nonresidential fixed investment (8%), exports (6%), and state and local government spending (0.8%) also increased. Meanwhile, the negative contributions came from private inventory investment, residential fixed investment (-9.8%), federal government spending (-10.4%) and imports (7.8%). The rapid spread of the coronavirus delta variant, supply-chain disruptions, shortage of workers and a cooling housing market are seen weighing on the growth for the rest of the year.
Published on 2021-07-29

US Economy Likely Grew at a Faster 8.5% in Q2
The US economy likely grew an annualized 8.5% on quarter in Q2, the second-fastest expansion in 38 years, as government stimulus and COVID-19 vaccinations supported spending on travel-related services that were restricted before. Still, the rapid spread of the coronavirus delta variant, supply-chain disruptions, shortage of workers and a cooling housing market are seen weighing on the growth for the rest of the year. The Fed sees the economy growing 7% in 2021 and 3.3% in 2022.
Published on 2021-07-29

US GDP Growth Confirmed at 6.4% in Q1
The US economy grew by an annualized 6.4 percent in the first quarter, matching the second estimate and following a 4.3 percent expansion in the previous three-month period. Upward revisions to nonresidential fixed investment, private inventory investment, and exports were offset by an upward revision to imports. On the production side, private goods-producing industries increased 5.4 percent, led by led by computer and electronic products, fabricated metal products, and machinery. Private services-producing industries jumped 7.7 percent, led by data processing, internet publishing, and other information services and government edged up 0.2 percent. Analysts see the economy expanding around 9% in Q2 as the recovery continues although rising price pressures are already weighing on some sectors, namely the housing market.
Published on 2021-06-24

OECD Revises Up Growth Forecasts
The Organization for Economic Cooperation and Development expects the global economy to expand 5.8% in 2021 and 4.4% in 2022, as vaccinations gather pace allowing authorities to ease restrictions and economic activity to accelerate while the US pumps trillions of dollars into the world's largest economy. Figures compare with a 5.6% growth for 2021 and a 4% advance for 2022 seen in March. Still, the organization warned the recovery is uneven across countries, with many emerging market economies being held back by slow vaccination deployment and new COVID-19 outbreaks. The US economy is seen growing 6.9% this year (up from 6.5% expected in March), China 8.5% (up from 7.8%), the UK 7.2% (up from 5.1%) and the Euro Area 4.3% (up from 3.9%).
Published on 2021-05-31

US GDP Growth Unrevised at 6.4%
The US economy grew by an annualized 6.4 percent in the first quarter, matching the advance estimate and following a 4.3 percent expansion in the previous three-month period. Markets were expecting a higher reading of 6.5 percent. Upward revisions to consumer spending and nonresidential fixed investment were offset by downward revisions to exports and private inventory investment. Imports were revised up. PCE prices however, were revised higher. The annual PCE inflation was 3.7 percent, above 3.5 percent in the advance estimate and the core was 2.5 percent, above 2.3 percent. The upward revision was led by used motor vehicle prices.
Published on 2021-05-27

US Q1 GDP Growth Beats Forecasts
The US economy grew by an annualized 6.4 percent in the first quarter, following a 4.3 percent expansion in the previous three-month period and slightly beating market expectations of 6.1 percent, the advance estimate showed. Activity and demand consolidated their recovery from last year's steep contraction, helped by reopening efforts amid an acceleration in the pace of COVID-19 vaccinations and continued government response related to the pandemic. Increases in personal consumption expenditures (PCE), nonresidential fixed investment, federal government spending, residential fixed investment, and state and local government spending were partly offset by decreases in private inventory investment and exports.
Published on 2021-04-29

US President Unveils New Infrastructure Plan
US President Joe Biden announced a $2.25 trillion infrastructure plan over an eight-year period including $621 billion for transportation, $580 billion for manufacturing and $400 billion to care for elderly and disabled. To pay for the plan, Biden proposed to raise the corporate income tax to 28% from 21% and increase taxes on companies’ foreign earnings. However, the package will likely face strong GOP opposition, specially over tax hikes. The second part of the stimulus plan dealing with healthcare and childcare is expected in a couple of weeks.
Published on 2021-03-31

US GDP Growth Revised Higher to 4.3%
The US economy expanded an annualized 4.3% on quarter in Q4 2020, higher than 4.1% in the second estimate, mainly due to an upward revision to private inventory investment that was partly offset by a downward revision to nonresidential fixed investment. Still, the expansion was slower compared to a record 33.4% growth in Q3 as the continued rise in COVID-19 cases and restrictions on activity moderated consumer spending. Considering full 2020, the GDP shrank 3.5%, the most since 1946 and following a 2.2% growth in 2019. The outlook for 2021 seems brighter than a few months ago as the vaccination campaign continues, the $1.9 trillion aid bill was approved and Americans already started receiving stimulus checks.
Published on 2021-03-25

US GDP Growth Revised Slightly Higher to 4.1%
The US economy expanded an annualized 4.1% in Q4 2020, slightly higher than the advance estimate of a 4% growth, the second estimate showed. Upward revisions to residential fixed investment, private inventory investment, and state and local government spending were partly offset by a downward revision to personal consumption expenditures. Figures compare with market forecasts of 4.2%. Still, the economy slowed from a record 33.4% expansion in Q3 as the continued rise in COVID-19 cases and restrictions on activity moderated consumer spending. Considering full 2020, the American GDP contracted 3.5%, the same as in the advance estimate and the worst performance since 1946. The outlook for 2021 seems brighter than it was some months ago as vaccination rollout began although at a slower than expected pace and as the new Biden administration unveiled a $1.9 trillion stimulus plan. However, the package hasn't been approved yet and current unemployment insurance benefits expire on March 14th.
Published on 2021-02-25

US GDP Growth Slows to 4% in Q4
The US economy expanded an annualized 4% in Q4 2020, slowing from a record 33.4% expansion in Q3 as the continued rise in COVID-19 cases and restrictions on activity moderated consumer spending. Figures came in line with market forecasts, the advance release showed. Both business and housing investment remained robust and exports grew at a double-digit pace while personal consumption slowed and public expenditure edged down. Considering full 2020, the GDP contracted 3.5%, the worst performance since 1946 but slightly less than forecasts of a 3.6% drop. It follows a 2.2% growth in 2019. The outlook for 2021 seems brighter than it was some months ago as vaccination rollout began although at a slower than expected pace and as the new Biden administration unveiled a $1.9 trillion stimulus plan. However, doubts remain whether Congress will pass the bill and how long it will take for Americans to start receiving checks.
Published on 2021-01-28

US GDP Growth to Slow to 4% in Q4
The US GDP likely grew an annualized 4% on quarter in Q4 2020, slowing from a record 33.4% expansion in Q3 when the economy started to recover from the coronavirus hit, lockdowns and business closures. Considering full 2020, the economy likely contracted 3.6%, the worst performance since 1946, and following 2.2% growth in 2019. The outlook for 2021 seems brighter than it was some months ago as vaccination rollout began although at a slower than expected pace and as the new Biden administration unveiled a $1.9 trillion stimulus plan. However, doubts remain whether Congress will pass the bill and how long it will take for Americans to start receiving checks. Also, unemployment figures remain high. 140K jobs were unexpectedly cut in December and initial claims remain stubbornly high above 700K per week. On the other hand, a resilient manufacturing sector and buoyant housing market have been the main drivers of growth.
Published on 2021-01-28

US GDP Growth Revised Slightly Higher to 33.4%
The US economy expanded by an annualized 33.4% in Q3 2020, slightly higher than 33.1% in the second estimate. It is the biggest expansion ever, following a record 31.4% plunge in Q2, as the economy rebounds from the coronavirus pandemic. The upward revision primarily reflected larger increases in personal consumption expenditures and nonresidential fixed investment. However, GDP is still 3.5% below its pre-pandemic level and although coronavirus vaccination already started, the pandemic is far from controlled. The country is recording an average of around 200K new cases every day and states are tightening restrictions. Also, Congress only approved a new $892 billion aid package late in December. It includes $600 payments to most Americans, a $300-per-week unemployment benefit and $284 billion for the Paycheck Protection Program but excludes aid for states and local governments.
Published on 2020-12-22

US GDP Growth Confirmed at Record 33.1%
The US economy expanded by an annualized 33.1% in Q3 2020, in line with the advance estimate. It is the biggest expansion ever, following a record 31.4% plunge in Q2, as the economy rebounds from the coronavirus pandemic. Upward revisions to business and housing investment, and exports were offset by downward revisions to personal and public consumption and private inventory investment. Still, personal spending was the main driver of growth, helped by checks and weekly unemployment benefits from the federal CARES Act. However, GDP is still 3.5% below its pre-pandemic level and although a coronavirus vaccine is expected to be ready soon, the pandemic is far from controlled. Also, only around half of the 22 million jobs lost were recovered so far and a new stimulus bill hasn't been approved yet.
Published on 2020-11-25

US GDP Grows at Record 33.1% in Q3
The US economy expanded by an annualized 33.1% in Q3 2020, beating forecasts of a 31% surge. It is the biggest expansion ever, following a record 31.4% plunge in Q2, as the economy rebounds from the coronavirus pandemic. Personal spending surged and was the main driver of growth, helped by checks and weekly unemployment benefits from the federal CARES Act. Growth also reflects increases in private inventory investment, exports, nonresidential fixed investment, and residential fixed investment that were partly offset by decreases in federal government spending (reflecting fewer fees paid to administer the Paycheck Protection Program loans). However, GDP is still 3.5% below its pre-pandemic level and the outlook for Q4 and 2021 remains uncertain as the pandemic is far from controlled and a vaccine is not ready yet. Also, out of more than 22 million jobs lost in March and April only around 11.3 million were recovered so far while a new stimulus bill hasn't been approved yet.
Published on 2020-10-29

US Economy to Book Record 31% Growth in Q3
The American economy likely grew an annualized 31% in Q3, which would be the biggest expansion ever, following a record 31.4% plunge in Q2 when the coronavirus hit the economy hard and many businesses were forced to close and people to stay at home. The economy shows signs of recovery and resilience: a monthly average of 2.2K nonfarm payrolls were added from May to September; both exports and imports are rising; the housing market is buoyant; ISM PMIs returned to pre-pandemic levels; many companies reported better-than-expected quarterly results; and a federal pandemic relief stimulus of $3 trillion supported consumer spending through checks and weekly unemployment benefits. However, out of more than 22 million jobs lost in March and April only around 11.3 million were recovered so far while a new stimulus bill hasn't been approved yet. The outlook for Q4 and 2021 remains uncertain as the pandemic is far from controlled and a vaccine is not ready yet.
Published on 2020-10-29

US GDP Contraction Revised Lower for 2nd Time
The US economy shrank by an annualized 31.4 percent in the second quarter of 2020, slightly lower than a 31.7 percent plunge in the second estimate and a 32.9 percent fall in the advance one. It reflects mainly an upward revision to personal consumption expenditures (PCE) that was partly offset by downward revisions to exports and to nonresidential fixed investment. Still, it remains the biggest contraction ever, pushing the economy into a recession as the coronavirus pandemic forced many businesses including restaurants, cafes, stores and factories to close and people to stay at home, hurting consumer and business spending.
Published on 2020-09-30

US GDP Contraction Revised Lower
The US economy shrank by an annualized 31.7 percent in the second quarter of 2020, lower than a 32.9 percent plunge in the advance estimate and compared to market forecasts of a 32.5 percent fall. Still, it is the biggest contraction ever, pushing the economy into a recession as the coronavirus pandemic forced many businesses including restaurants, cafes, stores and factories to close and people to stay at home, hurting consumer and business spending. Private inventory investment and personal consumption expenditures (PCE) decreased less than previously estimated. In contrast, business investment fell more, mainly due to structures and intellectual property products. The recovery will depend on the capacity of the country to control the pandemic and avoid more waves of infections. Fed officials see the US economy shrinking 6.5 percent in 2020.
Published on 2020-08-27

US Economy Shrinks at Record 32.9%
The US economy shrank by an annualized 32.9 percent in the second quarter of 2020, compared to forecasts of a 34.1 percent plunge, the advance estimate showed. It is the biggest contraction ever, pushing the economy into a recession as the coronavirus pandemic forced many businesses including restaurants, cafes, stores and factories to close and people to stay at home, hurting consumer and business spending. Decreases were seen in personal consumption, exports, private inventory investment, nonresidential fixed investment, residential fixed investment, and state and local government spending while federal government spending jumped. The recovery will depend on the capacity of the country to control the pandemic and avoid more waves of infections. Still, the number of new cases continues to increase, making several states to scale back or pause the reopening of their economies. Fed officials see the US economy shrinking 6.5 percent in 2020.
Published on 2020-07-30

US Economy Likely to Post Record Contraction
The US economy is expected to have shrank by an annualized 34.1 percent on quarter in the second quarter of 2020. It would be the sharpest contraction ever as the coronavirus pandemic forced many businesses including restaurants, cafes, stores and factories to close and people to stay at home, hurting consumer and business spending. Q2 contraction would also be more than four times worse than the decline seen during the 2007-09 financial crisis and would put the American economy in recession, following a 5 percent decrease in the first quarter. The recovery will depend on the capacity of the country to control the pandemic and avoid more waves of infections. Still, the number of new cases continues to increase, making several states to scale back or pause the reopening of their economies. Fed officials see the US economy shrinking 6.5 percent in 2020.
Published on 2020-07-30

US Economy Shrinks 5% in Q1
The US economy shrank by an annualized 5 percent in the first quarter of 2020, in line with the previous estimate and ending the longest period of expansion in the country's history. It is the biggest drop in GDP since the last quarter of 2008 as the Covid-19 pandemic forced several states to impose lockdown measures in mid-March, throwing millions of people out of work. With the third estimate, an upward revision to nonresidential fixed investment was offset by downward revisions to private inventory investment, personal consumption expenditures (PCE), and exports.
Published on 2020-06-25