US consumer sentiment figures from December and January have painted a less-than-bright picture of US economic prospects in the near term. Accordingly, bond yields have fallen and the official rate rises are off the table. However, the latest US GDP figures for the December quarter don’t appear to be quite so bleak.
The US Commerce Department has released December quarter “advance” GDP estimates and they indicate the US economy grew at an annualised growth rate of 2.6%. (Due to the US federal shutdown, this report for the December quarter replaced the “advance” estimate originally scheduled for the end of January as well as the second estimate.)
The growth figure was just above the 2.2% median of market estimates but markedly lower than the revised September quarter figure of 3.4%. Westpac’s AM Finance team described the figures as “surprisingly resilient… despite the steep slowing in activity implied by partial data, especially in the month of December.”
ANZ senior economist Cherelle Murphy pointed to the growth of various GDP components and said they “helped soothe concerns about a broad-based slowdown in Q4”. However, she also said first quarter data to date suggest “growth may have a little more momentum to shed yet.”