As per the latest numbers, the US economy expanded at the fastest pace in recent times of 4% as economic activity picked up big time.
More than expected accelerated economic growth of the US economy in the second quarter would help clock a stronger performance during the remaining part of the year.
- Domestic demand rose at 2.8%, the fastest in 3 years.
- Employment growth exceeded 200,000 jobs per month in the last almost 6 months.
- Growth in consumer spending accelerated at 2.5%.
- The savings rate increased to 5.3% from 4.9%.
- Price index rose at a 2.3% in the second quarter, the quickest in three years.
- Growth in the second quarter was due toincreased consumer spending.
- Government spending, investments by business houses, and increased housing development activity helped the US economy register better numbers.
- GDP of the US is likely to show a better growth trend compared with earlier expectations of around 2.5%.
Concerns over monetary policy also eased to an extent. We assume that the GDP data is not likely to impact the monetary policy, since the US Fed has already dismissed the abnormal first quarter contraction. The first quarter contraction is connected to the weather-related issues.
U.S. Economic Indicators
|GDP Billion USD||
The numbers mostly indicate that the US economy is going well on its recovery path, and with the US being one of the big services consumers for India, this would impact the Indian economy positively. Further, IT and other export-oriented companies are likely to benefit from this trend. Investors might expect Indian markets to remain strong, with the overall global economic outlook looking positive.
Product Research & Financial Planning Desk
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