US Economy Expanded By 1.4% In Q4, 2.4% For All Of 2015

New York (Mar 26)  The U.S. economy growth in the fourth quarter of 2015 was slightly stronger than expected, according to the latest data from the Commerce Department.

Friday, the final reading of U.S. fourth quarter gross domestic product (GDP) showed the economy grew by 1.4%, up slightly from the second estimate of 1.0%. Economists were not expecting no change in GDP growth. The report noted that economic activity was still weaker in the last three months of the year, down from 2.0% from third-quarter GDP.

Annually, the U.S. economy expanded by 2.4% in 2015, the same increase seen in 2014, according to the report.

One of the highlights of the report was real gross domestic purchases, which increased 1.5% in the fourth quarter, up from the previous estimate of 1.2%; however the data is still down from a 2.2% increase seen in the third quarter.

A lot of attention has been focused on U.S. domestic demand as it is expected to be the biggest driver of economic growth in 2015. Economists have pretty much written off the manufacturing sector as a strong U.S. dollar has significantly reduced the country's exports.

Inflation pressures remain fairly subdued as the price index for gross domestic roe 0.4% in the last three months of the year, unchanged from the previous report and down from 1.3% seen in the third quarter. Excluding volatile food and energy prices, the core price index showed an increase of 1.3%, up from the previous estimate of 1.0% but unchanged from 1.3% seen in the third quarter.

U.S. markets are closed Friday for the Easter long weekend so traders will have to wait until Monday to gauge the impact of the latest data.Slightly stronger GDP in the fourth quarter could help to further reduce expectations that the U.S. will fall into a recession and could support a sooner-than expected interest rate hike from the Federal Reserve.

In the Federal Reserve last economic projections, the central bank said that they expect the U.S. economy to expand by 2.2% in 2016.

Source: KitcoNews