Sunday 01 Oct 2023
By /
main news image

KUALA LUMPUR (Nov 30): AmBank Group Research the strong U.S. gross domestic product (GDP) growth in 3Q2017 strengthens the case for the US Fed to raise rates by 25 basis points (bps) during the December FOMC meeting.

In a report today, AmBank group chief economist and head of research Anthony Dass said the 3Q2017 GDP was revised upwards to 3.3% annualized rate from 3%, indicating the economy grew at its fastest pace since 3Q2014 supported by business equipment and inventory, added with consumer spending and corporate earnings.

Dass said growth was largely supported by spending on business equipment which gained 10.4%, a three-year high from 8.6%; consumer spending, the biggest part of the economy, growing 2.3% (est. 2.5%); revised from 2.4%; down from 3.3% in 2Q; and corporate pre-tax earnings rising 5.4% year-on-year (y-o-y), following a 6.3% y-o-y gain.

“Meanwhile, if we exclude the contribution of inventory to GDP, the 3Q2017 GDP growth is overstated. For 3Q2017, inventory investment contributed 0.8 percentage point to GDP growth versus previously reported 0.73 percentage point.

“If we exclude the inventory contribution, the GDP expanded at 2.5%.

“Still we believe the strong GDP print strengthens the case for the US Fed to raise rates by 25bps during the December FOMC meeting,” he said.


      Text Size