US growth boosted by consumption – Le Figaro

Sustainable fall of gas prices stimulate household purchases and offsets the negative impact in the oil regions of the United States.

The US consumer finally wakes up. Falling energy prices and strong job creation have boosted demand in the United States between April and June. After growing at a rate of only 1.8% in the first quarter, consumer spending is distributed at a rate of 2.9% in the second quarter.

The progress of consumption, which accounts for over two third of gross domestic product (GDP) in the US, largely explain the accelerated growth announced Thursday by the Commerce Department: according to a first estimate that will be the subject of corrections during the summer, the US economy returned to growth of 2.3% annualized in the second quarter.

If the GDP figure is a little worse than expected, however accelerating consumption exceeds the forecasts. The comparison with the first quarter, however, is complicated by the changes made by the Commerce Department to measure the performance of the US economy. The Bureau of Economic Analysis seeks to better address the strong seasonal variations which for several years often give the impression that the activity in the first quarter is severely disabled.

As a result of an extraordinary winter rigorous, and because of a long strike in the ports of the West Coast that disrupted foreign trade, initially it was estimated that the US economy contracted at a rate of 0.2% in first quarter 2015. The new official verdict is less severe: the GDP would eventually expanded by 0.6%. This explains in part that the rebound in the second quarter is relatively less marked than expected.

The acceleration of consumption, eagerly awaited for months, however materializes. Several hypotheses have been advanced to explain the delay. The polar winter temperatures have naturally contributed. But some experts also believe that the American consumer probably does not consider sustainable incredible drop in gasoline prices that dope yet its purchasing power.

Over the past year, the collapse of more than half of the US oil price has yet resulted in a decrease of nearly a quarter of the price of gasoline at the pump. However, households seem to have preferred to devote much of this economy to pay down debt rather than for other purchases.

The fall in oil prices has a negative impact in a handful of states like Texas, Oklahoma and Louisiana, responsible since 2009 for many of the jobs created through the shale oil boom. This contributed to the delay of the rebound in activity.

The good news is that in recent months, other states such as Florida and California, finally experiencing a resurgence in hiring which compensates for the discomfort created by the plunge of investments and the lay-offs in the oil regions. The recovery in employment is obvious from the beginning of the year in 46 states and not in 36 as last year at this time. Better, hiring grew faster than the labor force.

The Federal Reserve, encouraged by the fall in the unemployment rate to 5.3% in June, against 6.1% a year earlier, Wednesday night confirmed its predisposition to meet before the end of the year the policy rate for the first time since the end of 2008. The latest GDP figures released Thursday should reinforce the in this position.