US Drought Weighed on GDP – Could Have Been +2.4%
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US Drought Weighed on GDP – Could Have Been +2.4%

US GDP growth could have been higher in Q3, at +2.4% (annualized), if it weren’t for the ongoing drought. Tapping into inventories made the actual result +2%, only marginally above expectations.

The drought in the US lowered farm inventories and this subtracted 0.4% from the bottom line. This is relatively encouraging.

So, when this issue is resolved, inventories will have to be rebuilt, pushing growth into the near future. However, the lower exports amid a global slowdown (Chinese landing, European debt crisis), could be a bigger danger to the US economy.

Official expectations stood on +1.9%, but the worse-than-expected durable goods orders lowered expectations. It’s important to note that the data undergoes two official revisions – the last one is called “final”, but this data is also far from final, as it can sometimes be revised more than one year later.

Economic figures from the world’s No. 1 economy have been mixed of late, with a stronger performance from the housing sector and a weaker one from manufacturing.

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.