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US fourth quarter GDP preview

Today first estimate of US fourth quarter GDP will be released at 13:30 GMT.

After first US rate hike by FOMC, GDP figure stands vital in determining FED's next move. However it is important to note this GDP is largely before FED hike.

Past trends -

  • US GDP picked up pace since 2013 and increased pace in 2014. However after rising 5% and 2.2% in previous two quarters, US GDP shrank by -0.1% in the first quarter of 2015. Historically speaking US economy usually falters in first quarter.
  • Second quarter was relatively better, with GDP growing at 2.1% in second quarter from the first.
  • Growth has slowed further in third quarter, with GDP growing about 1.3%.

Expectation today -

  • Market is expecting GDP to slow down further and grow only by 0.8% in final quarter of 2015.
  • However data could surprise to the upside, given strong showing in employment gains.

Market impact -

Market impact could be mute if data surprise to the downside except for Dollar might suffer partial setback, whereas better than expected data likely to push equities higher, feeding into risk appetite.

  • Market Data
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