Wealth Manager - the site for professional investment managers

Register for full access to Citywire’s Fund Manager database, news and analysis. Registration is free and only takes a minute.

Government shutdown results in big US GDP downgrade

Government shutdown results in big US GDP downgrade

The US economy expanded at a slower rate than previously estimated in the final three months of 2013.

Fourth quarter GDP growth was revised down from an initial reading of 3.2% to 2.4%. The more tepid performance in the final months of the year follows the 4.1% surge in the third quarter.

Capital Economics' Paul Ashworth was not too concerned by the downgrade, pointing out the growth was still impressive given the goverment shutdown in October as the nation tried to find a resolution to its debt crisis. The shutdown resulted in a 5.6% drop in public spending, which subtracted more than 1% from growth.

For Ashworth the good news was the 7.3% increase in business investment, revised up from the initial estimate of a 3.8% gain, which helped to offset an 8.7% decline in residential investment.

He is now predicting a 2% growth in the first quarter of 2014, before an escalation towards the 3% mark.

'Once the weather-effects begin to unwind in the second quarter, we would anticipate a pick-up in GDP growth to nearer 3% annualised over the remaining three quarters of this year,' Ashworth said.  

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Investment Pulse: the highs and lows of 2014

Investment Pulse: the highs and lows of 2014

This week's Investment Pulse looks back at some of the biggest stories of the year as well as looking forward to 2015.

Play Inside ETFs: Why the US bull-run still has legs

Inside ETFs: Why the US bull-run still has legs

Global equities suffered a sharp sell-off in the third quarter but exchange traded fund investors are continuing to back the US to outperform in 2015

Play Paul Niven: I won't rip up the Foreign & Colonial Trust history book

Paul Niven: I won't rip up the Foreign & Colonial Trust history book

The newly appointed manager of the Foreign & Colonial trust talks about his plans for UK's oldest investment company.

Your Business: Cover Star Club

Manchester wealth firm hires Coutts director for London launch

Manchester wealth firm hires Coutts director for London launch

Former Coutts director Tony Robinson has joined Chartered Wealth Management to head the company’s newly opened London office.

Wealth Manager on Twitter