The U.S. Economic Growth

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TheU.S. Economic Growth

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TheU.S. Economic Growth

TheAmerican economy as recorded a better performance than it waspredicted for the last quarter. Initially, the Department of Commercehad predicted a dismal 1.5% economic growth, but a revision ofinventories has seen the figure being put up to an impressive 2.1%.Despite this being much lower than the figure reported in the spring,it is still a positive indication considering businesses haveimproved their turnover due to an improved consumer purchasing power.

Averagely,the U.S. economy is expected to maintain a growth of 2.5%, which isnot far from 2.4%, the figure recorded last year. Despite the factthat this seems a small and unpromising growth, a number ofstakeholders have shown a positive reaction by suggesting that the‘tortoise recovery’ is finally reaching the finish line.According to Jan Hatzius, a chief economist at Goldman Sachs,employment rates are expected to come to full recovery in the next 12months.

Dueto the low unemployment rate coupled with a cash-rich consumer bodywith increasingly secure jobs, the Federal Reserve might decide toraise the interest rates. This will be their first move of this kindin a decade. Of the 20 cities used in the survey, only Detroit arearemains unchanged. House prices in the 19 cities, most of which aretech hotspots, have shot up by 5.5%. There is an expected gain of200,000 jobs in November, according to a report by Barclays, playinga part in increased consumption. All eyes are now on the FederalReserve to see if there will be an already-expected increase in therates after they meet on December 15 and 16th.

References

Schwartz,N. D. (2015). U.S. Economic Growth for 3rd Quarter Revised Up to2.1%: The New York Times.

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