Daily Insight
Group Economics Macro & Financial Markets Research
30 October 2015
US in a lower growth gear
US GDP growth weakens; though inventories were a sharp drag
Maritza Cabezas
Report could raise concerns of more dovish FOMC members
Senior Economist
Upcoming job numbers will be critical for rate decision
Tel: +31 20 343 5618 maritza.cabezas@nl.abnamro.com
US GDP growth weakens The US economy went down a gear in the third quarter. The first estimate of GDP growth was only 1.5% in the first quarter after growing 3.9% in the second quarter. The growth in consumption remains the bright spot, with a contribution to GDP of 2.2%. Inventories, a volatile category, stripped 1.4 percentage points off GDP. This could be a reflection of the weakness in manufacturing and the sharp fall is likely to be temporary. The contribution of the external sector was neutral. On average, the contribution of net export growth has been a drag to growth so far this year, and this is likely to continue going into the next quarter as a result of the strong dollar and lacklustre world trade growth. Meanwhile the contribution of fixed investment growth was also weak, particularly investment in structures. Investment in mining structures remains depressed, given the low level of oil prices.
US GDP growth softer than expected
6 4 2 0 -2 -4 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015 Consumption
Investment
Government
Inventory
Net trade
GDP growth
Source: Thomson Reuters Datastream
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