US Economic Update – US GDP Q4 2014

U.S. GDP growth decelerated in the December quarter to a still solid 0.65% qoq (2.6% on an annualised basis). This suggests that the economy is growing at an above long-term trend rate. As a result, unutilised capacity in the economy continues to decline.

By

  • GDP growth declerated in the December quarter to 2.6% qoq (annualised). While lower than expected, this still represents solid, above-trend, growth.
  • Consumption was strong, assisted by falling gasoline prices, as was inventory accumulation. However, business fixed investment weakened, while both net exports and public demand were a drag on growth.
  • We have maintained our forecasts of GDP growth of 3.3% in 2015 and 2.7% in 2016.

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