The U.S. economy continued to expand, with GDP coming in at a 3.2 percent pace in the fourth quarter as Americans’ spending climbed the most in three years, laying the ground for further improvement in 2014. The annualized gain in gross domestic product matched the median forecast in a Bloomberg survey and followed a 4.1 percent advance in the prior three months. Growth in the second half of the year was the strongest since the six months ended in March 2012. Consumer spending, which accounts for almost 70 percent of the economy, rose 3.3 percent. The pickup in demand allowed the economy to overcome cutbacks in government outlays caused by the partial federal shutdown in October. Diminishing fiscal challenges and progress in the labor market will probably sustain consumer and corporate demand in 2014, helping explain why the Federal Reserve decided yesterday pare its monthly stimulus by $10 Billion per month.
Applications for unemployment benefits in the U.S. rose more than forecast last week to the highest level in more than a month, partly reversing a post-holiday slump. Jobless claims climbed by 19,000 to 348,000 in the period ended Jan. 25, which included the Martin Luther King holiday. The reading was the highest since mid-December. The median forecast of 55 economists surveyed by Bloomberg projected 330,000. Claims are sometimes difficult to seasonally adjust during holiday weeks, although a Labor Department spokesman said there was nothing unusual in the data. Federal Reserve policy makers said yesterday that while labor market data since the end of last year have been “mixed,” there are signs of improvement.
Economic Event | Period | Economic Survey | Actual Reported | Original Prior | Revised Prior |
GDP Annualized QoQ | 4Q A | 3.2% | 3.2% | 4.1% | -- |
Personal Consumption | 4Q A | 3.7% | 3.3% | 2.0% | -- |
GDP Price Index | 4Q A | 1.2% | 1.3% | 2.0% | -- |
Core PCE QoQ | 4Q A | 1.1% | 1.1% | 1.4% | -- |
Initial Jobless Claims | 41664 | 330K | 348K | 326K | 329K |
Continuing Claims | 41657 | 3000K | 2991K | 3056K | 3007K |
ISM Milwaukee | Jan | 54.5 | 52.82 | 54.27 | -- |
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"Advice is what we ask for when we already know the answer but wish we didn't." ~ Erica Jong
John Broussard
Assistant State Treasurer
Chief Investment Officer
State of Louisiana
Department of the Treasury
225-342-0013
jbroussard@treasury.state.la.us
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