[link=http://www.parkiet.com/artykul/892595_Amerykanska_gospodarka_na_sporym_plusie.html]While the headline number for the 4th quarter GDP growth is indeed impressive it is always worth to take a look under the carpet.[/link] It was expected that the GDP will be fueled by inventory rebuilding. But the 3,8% contribution is a massive thing. It tells us that companies are much more optimistic about the future – which is a good thing, but then again, subtracting that contribution from the headline number would leave us with a miserable 1,6%. In the second quarter, for instance, the contribution from inventories was negative at 1,4%. Add that to the current figures and you are left with 0,5%...
It doesn’t mean that the numbers are weak – there is a positive contribution from private spending, although not on durable goods. Private investments in machines and software are adding to the growth too. It supports the scenario of gradual recovery, perhaps at around 2-2,5% annually, still associated with a relaxed stance of monetary policy and no rush to curb fiscal deficit in the US.
Nevertheless, a reaction on the stock markets is clearly positive. Will that be enough to reverse the short term bearish sentiment? It’s too early to say. Perhaps investors will need to see a confirmation from important monthly figures about to be released next week (ISM, payrolls). A reaction on the EURUSD is much more vague. At first the dollar was gaining, but the reaction was negated quickly. For as long as rates expectations in the US are contained, the impact of the US figures on the dollar remains uncertain.
Przemysław Kwiecień
Chief Economist
