NEW YORK (Forex News Now) – While the US continues to invest in its high tech industries, the country’s third quarter growth of 2.5 percent continues to be underwhelming compared to previous recoveries. That being said the ongoing pattern of steady final sales, low inflation and moderating profits tend to suggest a sustainable expansion in the long term. Financial Analyst John Sylvia from Wells Fargo Investments provided a succinct analysis of what the recently released GDP report mean for the US economy. The following is an excerpt from his report:
Final Sales Improve, Love of Tech Remains
- Real final sales rose at a 1.2 percent pace in the third quarter which is a bit stronger than average over the past four quarters. Personal consumption has improved as well as state & local spending.
- Equipment & software spending by business remains the big plus for growth with double-digit gains over the last four quarters. The push for competitiveness through tech remains.
Inflation Low, Profit Growth Slows
- Core personal consumption prices rose 0.8 percent in the third quarter. This is consistent with continued low inflation and allows the Fed to pursue its quantitative easing.
- Profit growth continues to moderate with a gain of 2.8 percent in the third quarter and up 27.8 percent year-over-year. Domestic financial and non-financial profits both rose in the third quarter while non-financial profits rose at a slower pace.