US Economic Update – January 2015

The US economy is currently enjoying a strong patch of growth. Small business confidence is at a recovery high, consumer confidence continues to increase, and household incomes – already benefiting from strong employment growth – are being further boosted by the fall in oil prices.

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  • The U.S economy is enjoying a strong patch of growth. Overall we have revised up our GDP growth forecasts and now expect 2.4% in 2014 (previously 2.3%) and 3.2% in 2015 (was 3.0%) although 2016 has been revised down from 2.8% to 2.7%.
  • Inflation is falling reflecting the plunge in oil prices, as well as the appreciation of the US dollar.
  • Monetary policy is likely to start tightening from mid-year. Low inflation (actual or expected) remains the main risk that may delay rate hikes.

For further details, please see the attached document: