Private consumption, rebound in non-residential investments to drive U.S. economy in coming quarters

In the third quarter of 2016, the U.S. economic growth improved after recording three weak quarters of growth from the fourth quarter of 2015 to the second quarter of 2016. The economy expanded 2.9 percent quarter-on-quarter in the September quarter after posting growth of around 1 percent from the fourth quarter of 2015 to the second quarter of 2016.

Also, it is encouraging that the first indicators for the fourth quarter imply that the economy has continued to expand at the pace of above the trend level. As expected, the U.S. economy does not seem to be impacted from the U.S. election or the Trump victory in the short term.

The U.S. GDP is expected to expand around 2.25 percent in the quarters ahead, led by private consumption and a recovery in non-residential investments, according to a Danske Bank research report. The U.S. economic rebound has been mainly driven by private consumption and it is expected to continue to be so in the years ahead. Private consumption will be underpinned by higher consumer sentiment, strong real wage growth and rising employment. It is expected to grow around 2 percent quarter-on-quarter in the years ahead, added Danske Bank.