The BEA published U.S. GDP (second estimate) for Q3 2015: The growth rate reached 2.1% – 0.1 pp above market estimates. In the first estimate the GDP growth rate was only 1.5%. And in Q2, the GDP grew by 3.9%. According to the report, there was a deceleration in exports, investments and government spending. But the upward revision from the first estimate was mostly due to a smaller than previously estimated decline in inventories. Despite this news, the U.S. dollar is still down for the day including against the Euro, Yen and Aussie dollar.
So although the headline figure was moderately better than expected, and higher from the first estimate, it still wasn’t too impressive to drive up the USD. The big question will remain whether this growth rate will be enough for the FOMC to raise rates, given the current growth rate of U.S. GDP. It’s true that growth in GDP isn’t part of the Fed’s dual mandate. But it’s another important figure that influences the FOMC members.
For further reading:
- Financial Market Preview for November 23-27
- Between Terror and Thanksgiving – MM #77
- U.S. GDP – Only a 1.5% Gain in Q3
- Will The Fed Do the Old Switcheroo?
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