US GDP data disappoints

Date: Friday 27 Jan 2012

Preliminary fourth quarter gross domestic product (GDP) for the United States came in at 2.8% compared to the 3% that was expected.

Inventories rose by $56bn and consumer spending rose by 2% (compared to the previous quarter's reading of 1.7%).

The GDP price index came in at 0.4%, the lowest since the third quarter of 2009. Business spending rose 1.7%, exports rose 4.7%, and imports rose 4.4%.

"All in all, looking past some of the volatile movements that are unlikely to persist - such as the sharp rise in inventories and sharp drop in defense spending - today's report provides a picture of modest, if unspectacular, growth in domestic demand," according to Barclays Capital analyst Peter Newland.

"Our view remains that the recovery will continue gradually to build momentum, but this is unlikely to shift the dovish stance of monetary policy," he said.

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