US economy set to post strong growth figures
President Barack Obama vowed in his State of the Union address on Wednesday to make job creation his top priority
- guardian.co.uk, Friday 29 January 2010 08.24 GMT
- Article history
Markets are anticipating a strong US GDP number. Photograph: Brendan McDermid/Reuters
The US economy is forecast to have gathered steam in the final three months of last year, helped by a gradual revival of the housing market.
Wall Street analysts expect growth to have picked up to 4.6% in the fourth quarter on an annualised basis, up from 2.2% in the third. This would mark the best quarterly performance since 2006. Some even predict growth of 6%, a figure not seen since 2003. The US GDP data is out at 1.30pm UK time. A weaker number could send stocks around the world into a tailspin.
Reassuring markets, the US Senate backed Federal Reserve chairman Ben Bernanke for a second four-year term yesterday. A slew of bullish company results overnight will also boost investor sentiment today.
Microsoft beat forecasts with a 60% jump in quarterly profits and said it expected companies' spending on technology to bounce back this year. Amazon's fourth-quarter profits skyrocketed 71%, and consumer goods companies Procter & Gamble and Colgate-Palmolive also posted better-than-expected results last night thanks to an upturn in consumer spending.
The US housing market is slowly recovering, industrial production is rising and job losses have eased, although companies remain reluctant to hire. US jobless claims fell less than expected last week, government figures showed yesterday.
Many analysts worry that the recovery could peter out again in coming months. Economists say the unemployment rate, still at 10%, is an obstacle to a lasting recovery.
"Even though the US economy is growing, the key figure is the unemployment rate," said Clarence Chu of Hudson Capital Energy in Singapore. "Until I see that the US is consistently creating jobs for a few months in a row, I'm not convinced that demand will increase."
President Barack Obama vowed in his State of the Union address on Wednesday to make job creation his top priority.
Oil was steady near $74 a barrel today, heading for a third weekly drop in a row.
The latest UK growth data published earlier this week showed the economy only just scraped out of recession in the fourth quarter. The meagre growth rate comes after a long road to recovery for the UK, which was the last major economy to emerge from the downturn.
0 comments:
Post a Comment