Real GDP in the United States increased by 2.4 percent in 2015 when compared to 2014. This growth rate represents the same tempo as in 2014. Growth was pulled up mainly by Personal Consumption Expenditures, Nonresidential fixed Investments, Private Inventory Investment, State and local Governments, and Exports. Although these figures of economic growth may look sluggish for many analysts, the truth is that they encompass good news for the American economy as far as investments concerns. The fact that economic growth was pushed up by both Personal Consumption Expenditures and nonresidential fixed investments means that both business people and consumers are confident about future economic outlook.
Consumption and Nonresidential Fixed Investments:
On one hand personal consumption expenditure reveals that people are spending and not holding back on economic plans. Such a situation, combined with recent data on household debt, shows household are in good stand not only for economic growth but also for absorbing unexpected economic shocks. Same intuition applies to businesses insofar as Nonresidential Fixed Investments grew considerable. Those Nonresidential Fixed Investments are the set of spending dedicated to improving and expanding business facilities. State and local state spending continue to bolster economic growth nationally proving public expenditures work out well for the economy.
Price Indexes have been dragging much of the GDP figures for the last year or so. Indeed, the price index for gross domestic purchases barely increased 0.4 percent during 2015. It is worth noting that in spite of deflationary pressures derived from low oil prices, the price index for purchases rose 1.2 percent in 2014.
On the quarterly basis, second estimates data for the last quarter of 2015 showed that the economy expanded at 1.0 percent (when compared 4Q2014 and 4Q2015). Unlike the year-round picture, the last quarter increases resulted mainly from residential fixed investments and federal government spending, whereas nonresidential fixed investments declined along with a decrease in private inventory investments.
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