Friday, January 27, 2012
US growth quickens in Q4, but speed-bumps ahead
The US economy grew at its fastest pace in 1-1/2 years in the fourth quarter of 2011, but a strong rebuilding of stocks by businesses and a slower pace of spending on capital goods hinted at softer growth early this year.
US gross domestic product expanded at a 2.8 percent annual rate, the Commerce Department said, a sharp acceleration from the 1.8 percent clip of the prior three months and the quickest pace since the second quarter of 2010.
It was, however, a touch below economists expectations in a Reuters poll for a 3 percent rate, and nearly 2 percentage points was due to the build-up in business inventories.
The report supported the Federal Reserve's ultra easy monetary policy stance to nurse the recovery.
"This seems consistent with the Fed's view that the U.S. economy is going to need all the help it can get to hit escape velocity in the next couple years," said David Watt, a senior currency strategist, RBC Capital, Toronto.
US gross domestic product expanded at a 2.8 percent annual rate, the Commerce Department said, a sharp acceleration from the 1.8 percent clip of the prior three months and the quickest pace since the second quarter of 2010.
It was, however, a touch below economists expectations in a Reuters poll for a 3 percent rate, and nearly 2 percentage points was due to the build-up in business inventories.
The report supported the Federal Reserve's ultra easy monetary policy stance to nurse the recovery.
"This seems consistent with the Fed's view that the U.S. economy is going to need all the help it can get to hit escape velocity in the next couple years," said David Watt, a senior currency strategist, RBC Capital, Toronto.
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