The Good And Bad In The 2015 American Economy

 

The New York Times recently published an article that summarized some of the current GDP numbers that were coming in. There were several positive indicators. One piece of the good news is that the economic growth of the country did not slow down as much as people expected it to. The numbers were .4 percent better than what had been forecasted and was due to several reasons. The other piece of the good news is that consumer spending in January is at an 8 month high. In January alone, consumer spending increased by .5 percent. Economists are also expecting further strengthened consumer spending, which is significant news because this aspect accounts for two thirds of the economic activity. This makes it a likely possibility that the economy will recover well from the slowdown in the fourth quarter of 2015.

The gross domestic product numbers were also released. It showed how 2015 was a year of ups and downs. The year started out with a terribly low .6 percent GDP growth in the first quarter. The second quarter proved to be promising with 3.9 percent GDP growth. The third quarter saw 2 percent growth and the fourth quarter dipped down to 1 percent growth, which is still higher than the .7 percent increase economists were predicting. The reason economists were predicting .7 percent is because there was less of a downturn in business stockpiling than expected and this helped to curb the weaker consumer spending.

The article went on to describe how the Federal Reserve is watching inflation closely to know when they should raise interest rates. Economists had expected the Federal Reserve to hike rates 4 times in 2016 but this dropped down to 2 when there was a rough patch in the economy at the beginning of the year. The Federal Reserve has an annual price increase target of 2 percent. However, in December the increase had only been .7 percent and in January it only it 1.3 percent. This jump in numbers from one month to the next was big enough to get the attention of the Federal Reserve, though.

There are many firms watching the numbers come out from the Federal Reserve and other agencies that give numbers for the previous quarters and forecast for the numbers to come. One such firm is Madison Street Capital. Madison Street Capital is an investment banking firm that specializes in middle market companies. It provides services in five categories, including valuation for financial reporting, corporate advisory, asset management industry focus, financial opinions and business valuation. The firm provides these services in offices located in Chicago, Ghana and Haryana, India.

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