The US economy continues growing slowly: 2% in the third quarter of 2012 (annualized), according to the first official GDP release. a growth rate of 1.7-1.9% was expected after a pace of 1.3% in Q2 2012. So, this is marginally above expectations.
EUR/USD managed to post a small recovery and rise above 1.29 before the publication. USD/JPY was trading under the 80 line. Both pairs are now dropping. Update: EUR/USD is resuming its rises now.
Update: Drought subtracts 0.4% percentage points from bottom line.
Also the Advance GDP Price Index exceeded expectations, rising by 2.8% instead of only 2% that was expected. This means that with a lower inflation rate, growth would be even larger.
Sales rose by 2.1%, consumer spending by 2% and PCE prices rose 1.8%, more than 1.7% that was predicted. The last figure is eyed by the Federal Reserve, that didn’t change its policy this week.
More data: home investment rose by over 14% and business investment by 1.3%. All the figures are annualized.
The worrying part for the US and for the whole world is that trade was a drag on GDP – the US is experiencing lower exports, like Japan and several other countries.
The slow pace of the recovery is a hot topic in the US elections: Obama supporters says he received the economy in a terrible situation and did his best – the economy is growing in the past 3 years. Supporters of Romney are saying that Obama failed to put the US on a path of real recovery.
Further reading: Dollar Loses Less Under Obama than Under George W. Bush
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