US Consumer Spending Experiencing Slowing Growth
US personal consumption expenditure (PCE) rebounded to increase by 0.4% mom in July, after remaining unchanged in June and compared with +0.1% in May. In real terms, PCE grew at a slightly faster pace of 0.2% mom in July, compared with +0.1% in June. On an annualised basis, the PCE, however, slowed down to 1.7% in July, from +2.0% in June and the peak of +2.5% in April-May, suggesting that consumer spending is losing momentum. The US uses this figure to compute its consumer spending in real GDP. However, judging from the m-o-m increase in real consumer spending, the third month of increase in four months in July, consumer spending is likely to remain resilient in the months ahead in supporting the US economy. As a result, we do not expect the US economy to fall back into a recession despite slowing growth. As it stands, the US economy slowed down to an annualised rate of 1.6% in the 2Q, the second consecutive quarter of easing and after reaching the peak of +5.0% in the 4Q of last year.
Tracking The World Economy... - 01/09/2010
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