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Personal consumption likely to mainly drive U.S. economic growth, says Lloyds Bank

The most recent economic data for the U.S. are in line with a strong rate of growth in the fourth quarter, although it is expected to be slower than the third quarter outturn of 3.5 percent that was flattered by a temporary sharp rise in agricultural exports. However, it might be as high as 3 percent.

According to a Lloyds Bank research report, personal consumption is likely to continue to be the main driver, supported by a robust labor market, along with positive contributions from fixed investment and inventories.

The payrolls growth seen in December came in lower than projections at 156,000; however, the previous month’s figure was upwardly revised, while earnings growth came in stronger than expected rise to a cyclical high of 2.9 percent year-on-year. But the core PCE deflator, which is the Fed’s preferred inflation gauge, dropped unexpectedly to 1.6 percent year-on-year in November and continues to stay below the target rate of 2 percent.

At 04:00 GMT, the FxWirePro's Hourly Strength Index of US Dollar was highly bearish at -163.255. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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