3 Apr 2015
Increased growth to fill the US labor market and GDP gap – BBH
FXStreet (Barcelona) - Commenting on the US jobs data release and the US economy, the Brown Brothers Harriman Team, note that the noticeable gap between labor market and GDP might be filled by increased growth rather than deterioration in the labor market.
Key Quotes
“While the jobs report was disappointing, in some ways it confirms what we already know. The US economy slowed markedly in Q1 15. The slowdown does not appear to be as pronounced in Q1 14, when the economy contracted by a 2.1% annualized pace. In some ways, though, investors are faced with a similar decision. Is the weakness in Q1 GDP indicative of the trajectory of the US economy or is it a function of transitory factors?”
“As we argued last year (and so too now), the US economy is not slipping back into a recession.The poor weather, port strikes, and payback from the more than 4% annualized pace of consumption growth in Q4 14. There has been a notable gap between the labor market and GDP. In the bigger picture, we expect the gap to be reduced by increased growth rather than deterioration in the labor market.”
Key Quotes
“While the jobs report was disappointing, in some ways it confirms what we already know. The US economy slowed markedly in Q1 15. The slowdown does not appear to be as pronounced in Q1 14, when the economy contracted by a 2.1% annualized pace. In some ways, though, investors are faced with a similar decision. Is the weakness in Q1 GDP indicative of the trajectory of the US economy or is it a function of transitory factors?”
“As we argued last year (and so too now), the US economy is not slipping back into a recession.The poor weather, port strikes, and payback from the more than 4% annualized pace of consumption growth in Q4 14. There has been a notable gap between the labor market and GDP. In the bigger picture, we expect the gap to be reduced by increased growth rather than deterioration in the labor market.”