The
Department of Commerce said the US economy grew faster than expected in the
last quarter of 2012. It was estimated that the growth would be 0.1%, but
thanks to increased investments in plant and equipment the growth rate was
0.4%. However at the moment the figures are lower than they were in the
previous quarter. The defence spending and government expenditures were cut which
hurt economic output. The revision of DGP did not have an impact on the overall
economy. During the October-December quarter showed that the home sales were
rising and the labor market was improving. Chief investment officer of Harbor
Advisory said that the economy is improving. According to last year’s rate, the
investment bank was expecting US GDP to increase by 2.2%. Last week the US
Federal Reserve said that stimulus measures are still needed. The Fed is buying
$85bn a month of Treasury bonds and mortgage backed securities so the borrowing
costs for households and businesses are lower. The Fed also wants to see long
term trend of falling unemployment.
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