USA is not a significant outperformer – Scotiabank

By FXStreet FXStreet (Guatemala) – Analysts at Scotiabank explained that the U.S. economy is not a significant outperformer.

Key Quotes:

“Annual real GDP will likely only average around 2½% this year — in line with last year’s advance — as it rides a rollercoaster pattern of quarterly output growth highlighted by the subdued 1.5% annualized increase in Q3 which followed a strong 3.9% annualized gain in the April-June period. However, the underlying strength in this uneven growth performance is the relatively solid and apparently sustainable pace of consumer spending and housing activity.”

“Combined, consumer spending and housing activity represent about 72% of the U.S. economy and have accounted for virtually all of output growth over the past year. This key support will be repeatedly put to the test since U.S. businesses have been reducing investments, largely in response to the cutbacks in energy-related expenditures, as well as the trimming of unwanted inventories.

Stocks had built up earlier in the year due to the unexpected moderation in domestic activity, coupled with the sagging of exports owing to slower growth internationally and the added drag of a stronger greenback.”
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Source:: FX Street