The growth of the US economy surged in Q3 the highest in eleven years, driven by consumption which force should be confirmed in the coming months with the decline in oil prices. The gross domestic product (GDP) US increased 5%. The figures are put into perspective, however, since the calculation is “annualized” in Q3, representing an upward revision of 1.1 percentage points compared to the second estimate (3.9%). It is the rhythm of the strongest growth since the summer of 2003.
This good figure has surprised analysts who were betting on growth already strong 4.3% while Wall Street s ‘flew Tuesday, the Dow Jones at the opening exceeding the historical threshold of 18,000 points. “2014 was a turning point,” said the White House in a statement. “The economy grew in the 3rd quarter at the fastest pace in more than a decade,” said Jason Furman, president of the Circle of Economic Advisers. He assured that “the robust expansion showed the strong underlying trend of recovery even if (…) there are transitory factors in the growth of the third quarter.”
tax decrease
From July to September, the activity of the world’s largest economy accelerated further, compared to 4.6% for the 2nd quarter and contraction of last winter (- 2.1%). The first estimate of fourth quarter comes to an end will only be known on 30 January. While consumption figures in December – the strongest month of the year – are not yet known, some analysts, like Paul Dales of Capital Economics, on Tuesday have raised their GDP growth forecast of 3% the last quarter of the year.
The dynamism in Q3 is indeed first reflection of optimistic consumers, encouraged by lower gasoline prices. The drop in fuel prices, which began this summer, acts as a “tax cut” like to say commentators. The low oil prices, which have fallen by 50% since June, are here to stay, further assures the International Monetary Fund (IMF).
“Capital expenditures weaken”
Consumer spending rose 3.2%, the strongest level since late 2013. The Americans have invested more in services, including health care, but also in entertainment. The sharp rise in purchases of durable goods (+ 9.2%), which relate to goods of a life span of more than three years, so more expensive and often involving the use of credit, is seen as a sign of confidence in the future.
Michael Gapen, Barclays Research analyst, “it says more about the expectations of consumers in relation to the labor market and income prospects than the price of cheaper gasoline” . A return of public spending also contributed to the expansion, a windfall that could not be repeated next year when Congress will be completely dominated by Republicans. They weighed almost to a point of growth in Q3 including a jump of nearly 10% of the expenditures of the federal government, driven by the defense.
The residential sector, however, is still disappointing, contributing only a tenth of a point to the growth. Do not expect such a rate of growth in the last quarter, some analysts say, as Chris Low of FTN Financial, see “Investment spending weaken” due to a backlash low prices Oil the energy industry. Doug Handler IHS, “the mégacroissance of the past two quarters will not last,” but as Standard & amp; Poor’s, placing it on an expansion of around 3% next year, a level that is the envy of many developed economies in the world.
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