‘Prospects for future activity look better than they have in some time, pointing to the need for companies to increase activity for what seems to be better demand ‘. -Mickey Levy, Berenberg Capital Markets
US economic growth slowed markedly in the last quarter of 2016 amid lower shipments of soybeans that bolstered exports. The Commerce Department reported the economy grew at an annualized pace of 1.9% in the three month period to December, after expanding 3.5% in the Q3. Market analysts expected the economy to grow at a 2.2% rate in the Q4. For all of 2016, growth was 1.6%, the weakest sine 2011. Low oil prices and the strong US Dollar put downward pressure on the economy last year. In the Q4, exports posted a 4.3% decline, the largest since the Q1 of 2015, compared to a 10% surge in the prior quarter. Weak exports contributed most to the fourth-quarter drop, offsetting strong consumer spending and business investment. The Commerce Department reported also that orders for durable goods dropped 0.4% month-over-month in December, missing expectations for a 2.7% increase. Meanwhile, November’s fall was revised up to 4.5% from 4.6%. The December decline was mainly driven by low orders for defense capital goods, which fell 33.4%, the largest monthly drop since May 2014. Excluding automobiles and transportation equipment, orders for core durable goods climbed 0.5%, in line with analysts’ forecasts, whereas the previous month’s gain of 0.5% was revised up to 0.6%.
