US: Facing global headwinds – Rabobank

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 9, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    Research Team at Rabobank, suggests that the negative impact of the struggling global economy, low oil prices and the strong dollar on the US economy has become evident in GDP growth slowing down to 1.0% (quarter-on-quarter, at an annualized rate) in Q4.

    Key Quotes

    “The impact of these factors on the manufacturing and mining sectors was visible in the negative contribution of business investment, inventories and net trade to GDP growth. In contrast, personal consumer spending and residential investment provided a positive contribution to GDP growth. This can partly be explained by the continued improvement in the labour market.

    While recent surveys show that the services sector has lost some of its momentum, it is less sensitive to the global economy. Employment growth in that sector should remain sufficient enough to further reduce labour market slack with unemployment falling to 4.9% in January.

    In addition, government spending is also supporting GDP growth. The US economy continues to grow because of its domestic strength, despite headwinds from overseas. What’s more, the low oil price also has some positive effects on the economy through lower transportation and energy costs for households and businesses.”
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