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FX.co ★ US economy slows down

US economy slows down

US economy slows down

US gross domestic product expanded at a rate of 0.7% in the fourth quarter of 2015, the Commerce Department said. In the previous quarter, the country’s GDP advanced 2%.
Annually, the US economic growth came in at 2.4% in 2015. Interestingly, the US economy fails to break 3% annual growth for the 11th straight year. Personal spending, which accounts for about 70 percent of the economy, rose in the October to December period. US consumer spending advanced 2.2%, slower than the 3% in the third quarter, but exceeding analysts’ expectations of a 1.8% increase.
Weak global demand and falling oil prices made most companies cut their capital expenditures. Business spending declined 1.8% on a yearly basis in the fourth quarter, for the first time in four years. Meanwhile, personal consumption expenditures (PCE) excluding food and energy, a preferred inflation gauge for the Fed, rose 1.2% in the fourth quarter compared with 1.4% earlier.

At its latest meeting, the Federal Market Open Committee left interest rates unchanged. The regulator plans to slow the pace of interest rate hikes as they believe the economic situation in the US is worsening with business activity decreasing despite the creation of new jobs.

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