Skip to main content

US economy progress.

 The US eco­nomy pos­ted bet­ter than expec­ted growth in the final quarter of 2022, even as the Fed's

US dollars

rate rises star­ted to weigh heav­ily on busi­ness activ­ity. That marked a slow­down from 3.2 per cent growth in the third quarter, reflect­ing the steps the US cent­ral bank has taken to damp demand. The Fed is now pre­par­ing to deliver a quarter-point rate rise, from the cur­rent range of 4.25 per cent to 4.5 per cent, next week as it weighs how much higher to go now that infla­tion appears to have peaked. Offi­cials broadly back the fed­eral funds' rate hit­ting 5 per cent, and for that level to be main­tained at least to the end of the year, sug­gest­ing fur­ther rises to come bey­ond the Feb­ru­ary decision.

The gross domestic product data are the latest sign the eco­nomy has proved more resi­li­ent than expec­ted in the face of sub­stan­tially higher bor­row­ing costs while also show­ing the Fed's actions are begin­ning to have a more not­able effect. «Look­ing at the head­line, it's all look­ing good. But, look­ing under the hood, it's just those troub­ling signs and a loss of momentum that we've been see­ing really in broad swaths of the data,» said James Knight­ley, chief inter­na­tional eco­nom­ist at ING. The fourth-quarter increase was fuelled in part by busi­nesses amass­ing invent­or­ies, espe­cially across the man­u­fac­tur­ing and util­it­ies sec­tors.

Con­sumer spend­ing, one of the main drivers of the US eco­nomy, was also steady, increas­ing 2.1 per cent. In a fur­ther sign of weak­ness, fixed invest­ment sank 6.7 per cent, with hous­ing-related invest­ment con­tract­ing 26.7 per cent on an annu­al­ised basis. Busi­ness invest­ment rose just 0.7 per cent. From the fourth quarter of 2021 to the fourth quarter of 2022, real GDP increased by 1 per cent, com­pared with 5.7 per cent in the same period a year earlier.

While the over­all labour mar­ket remains robust, with the unem­ploy­ment rate hov­er­ing at a multi-dec­ade low of 3.5 per cent, there are con­cerns about the out­look for the eco­nomy. «We could see a third con­sec­ut­ive of neg­at­ive growth».

www.sba.tax

Labels:

Comments

  1. Steve27 January 2023 at 10:27

    The US economy is strong but businesses do need more help to be able to ride out this year. Many have had or will have to lay off employees just to survive. Any help from the government would mean more people keep their jobs.

    ReplyDelete
    Replies
    1. Stuart27 January 2023 at 12:07

      We've already seen big companies like Microsoft or Amazon lay off a good number of people which isn't good. If such strong companies have to lay off so many people then what happens to little businesses?

      Delete
  2. Anonymous27 January 2023 at 14:13

    That increase is mostly because of businesses amassing inventories so it shouldn't fool us into thinking everything is going well. It isn't. Many businesses are suffering and might have to close their doors in the next few months.

    ReplyDelete

Post a Comment

Cloud Bookkeeping

H&M struggles with profitability.

  H&M blamed high clothes prices ,  its exit from Rus­sia and a cost-cut­ting pro­gramme for an unex­pec­tedly large col­lapse in its earn­ings as the world’s second-largest fash­ion retailer’s struggles with prof­it­ab­il­ity con­tinue .  Oper­at­ing profit plunged 87 per cent to SKr820mn in the fourth quarter to the end of Novem­ber from a year earlier .  Shares in H&M fell more than 4 per cent to SKr125 . 80 yes­ter­day ,  hav­ing lost nearly half of their value since their recent peak in April 2021 .  The Swedish retailer ,  which lags behind Indi­tex ,  the Span­ish owner of Zara ,  in sales and prof­it­ab­il­ity ,  launched a SKr2bn cost-cut­ting pro­gramme last year that included 1 , 500 job losses . H&M’s sales in the fourth quarter were up 10 per cent to SKr64 . 4bn but flat in local cur­rency terms .  It said sales from Decem­ber 1 to Janu­ary 25 had increased 5 per cent in local cur­ren­cies .  «Sales in ...
2 comments
Read more

Commercial properties continue to fall

  UK commercial property values and rents are projected to «tumble off a cliff edge» in the first quarter of 2023, as estate agents warn offices will fare worst as prices fall. A survey of more than 400 commercial agents forecast a 2.9 per cent decrease in prices per square foot across the industry in the first three months of the year, with offices falling 3.1 per cent. «Where we saw the market stop still, we will see the market finding its level, people working out where things are, where value is,» he said. Listed vehicles have already seen this valuation drop in their share prices, with real estates investment trusts such as Land Securities and British Land falling by a fifth or more this year. According to the RIB estate report, offices are expected to suffer the most significant sales price falls, with nearly a third of respondents expecting them to come down by more than 5 per cent. In addition, the survey projected a 1.3 per cent fall in rents per square foot over the perio...
Post a Comment
Read more

BoE is considering to increase deposit guarantee.

  According to anonymous sources, the Bank of England is considering reforming its deposit guarantee scheme. The move comes in response to concerns that the current system may not be sufficient to protect customers in case of a bank failure. The Financial Services Compensation Scheme guarantees deposits up to £85,000 per person per institution. However, some experts have raised concerns that this may not be enough to prevent a run on banks in a significant financial crisis. As a result, the Bank of England is reportedly considering several options for reforming the scheme, including increasing protection and introducing more stringent bank regulations. A final decision on any changes will be made later this year. One option the Bank of England considers is increasing the protection offered by the deposit guarantee scheme. This could involve raising the maximum amount guaranteed per person or extending coverage to more types of deposits. Another possibility is to introduce more stri...
Post a Comment
Read more