Page 7 - ATD27Febr2016

U.S. NEWS A7
US Financial Front:
Economy ends 2015 on better note, starts 2016 with a bang
MARTIN CRUTSINGER
AP Economics Writer
WASHINGTON (AP) — The
U.S. economy got a double
dose of good news Friday.
Economic growth in the
final three months of 2015
didn’t slow as much as
previously estimated, and
consumers roared back to
life in January, spending
at the fastest clip in eight percent growth posted in
months.
The Commerce
Department said that
consumer spending
increased 0.5 percent last
month, the best showing
since May and far higher
than the tiny 0.1 percent
gain in December.
Economists are expecting
stronger consumer
spending, which accounts
for two-thirds of economic
activity, to lift overall
economic growth in the
new year after a fourth-
quarter slowdown.
In a separate report, the
government said the
gross domestic product,
the broadest measure of
economic health, grew at
an annual rate of 1 percent
in the fourth quarter. That’s
an improvement from the
first estimate of 0.7 percent,
though just half the 2
the third quarter.
The revision was made
because the downturn
in business stockpiling
was less severe than the
government’s first estimate.
That helped offset
slightly weaker consumer
spending.
The Federal Reserve is
closely watching economic
data to determine how
fast it needs to raise
interest rates this year. The
spending report showed
that inflation, by a price
Saturday 27 February 2016
watching price increases
for signals on how fast to
raise interest rates. The Fed
boosted a key rate by a
quarter point in December,
moving it from a record
low near zero, where it had
been for seven years.
After a stretch of economic
turbulence at the beginning
of the year, economists
had trimmed their forecasts
for 2016 rate hikes from four
down to two. But if inflation
accelerates more, that
could encourage the Fed
to move rates higher more
quickly.
The latest GDP figure
does little to change the
fact that growth in the
final months of 2015 was
modest. Since then, global
weakness and financial
market turbulence have
triggered worries about the
potential fallout on the U.S.
economy.q
Shoppers stop to look in the window of a lighting store in the
Design District of Miami Beach, Fla. On Friday, Feb. 26, 2016, the
Commerce Department issued the second of three estimates
of how the U.S. economy performed in the October-December
quarter.
(AP Photo/Lynne Sladky)
measure preferred by the the Fed’s inflation target
Fed, rose by 1.3 percent of 2 percent annual price
in the 12 months ending increases.
in January. That is nearly Still, the inflation jump was
double the 0.7 percent sharp enough that it is sure
12-month gain seen in to attract attention among
December but still below Fed officials who are