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United States GDP Numbers Show Slowdown in Q2 2019

Jordan Baird

Jordan Baird is the head ASR Wealth Advisers client services desk and has been with the organisation since 2017. He first started investing in his early years. While he believes that investors should leave no stone unturned he has a particular interest in trading based on broad macroeconomic trends along with specific analysis of innovative up-and-coming companies.

On Friday (26 July 2019), the US GDP figures were released for Q2 2019. GDP for Q2 2019 shows that the US economy grew at an annual rate of 2.1 per cent, down from Q1 2019 of 3.1 per cent annual growth. This result was slightly above market expectations (Dow Jones estimates), with the market estimating 2.0 per cent annual growth for Q2 2019.

GDP-growth-US

Consumer spending growth was stronger than expected with 4.3 per cent annual growth, while the estimate was 4.0 per cent. As consumer spending accounts for two-thirds of economic activity, this is a very positive result for the US economy. The main reason for the strong increase in consumption growth was the Trump tax cut, which allowed for further growth in consumer spending.

The main disappointment from the Q2 results is that private business investment dropped 5.5 per cent in Q2 compared with Q1. This is mainly due to weak private investment into infrastructure. Another reason for the slump in investment is continued concerns in the business world surrounding the back and forth nature of the US and China trade war.

Overall, in the last decade, the US economy has seen one of the longest periods of continued US expansion in history. However, this expansion has been relatively weak, with GDP fluctuating around 2.5 per cent growth.

 


 

Disclaimer:

This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978) (“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).

This article is provided for informational purpose only and does not purport to contain all matters relevant to any particular investment or financial instrument. Any market commentary in this communication is not intended to constitute “research” as defined by applicable regulations. Whilst information published on or accessed via this website is believed to be reliable, as far as permitted by law we make no representations as to its ongoing availability, accuracy or completeness. Any quotes or prices used herein are current at the time of preparation. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceeding. The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor in relation to any information contained herein. Any projections are estimates only and may not be realised in the future.

ASR has no position in any of the stocks mentioned.

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