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28 Mar 2013
Forex Flash: US growth rebound likely to be temporary - Nomura
FXstreet.com (Barcelona) - Nomura economist Charles St-Arnaud believes that the US growth rebound looks likely to be temporary.
He begins by noting that monthly GDP increased by 0.2% MoM in January, higher than expectations, and follows a decline of 0.2% in December. Further, he adds that the goods-producing side of the economy increased 0.4% on the month, with big rises in manufacturing (+1.2% m-o-m) and mining, quarrying, and oil and gas extraction (+1.2% m-o-m), while there was a decline in agriculture (-0.3% m-o-m) and construction (-0.1% m-o-m).
Additionally, the rebound in the manufacturing sector follows a sharp fall (-1.9% m-o-m) in December. The service sector increased by 0.2% m-o-m coming from a rebound in wholesale trade (+0.7% m-o-m) and arts, entertainment and recreation (+4.1% m-o-m) and some robust growth in real estate (+0.3% m-o-m), education (+0.3% m-o-m) and accommodation and food services (+0.8% m-o-m). However, there were some declines in transport (-0.2% m-o-m), finance and insurance (-0.1% m-o-m) and professional, scientific and technical services (-0.2% m-o-m).
Overall, St-Arnaud notes that while growth was stronger than expected in January, the details suggest that it could be short lived. He writes, “Roughly two-thirds of the growth over the month can be attributed to the rebound in manufacturing and wholesale, suggesting that the underlying strength of the economy is weaker than indicated by the headline number. Moreover, with these corrections out of the way, growth will likely be weaker in February, because of the weak momentum in the data. We continue to expect that growth in Q1 will be around 1.5% q-o-q ar.”
He begins by noting that monthly GDP increased by 0.2% MoM in January, higher than expectations, and follows a decline of 0.2% in December. Further, he adds that the goods-producing side of the economy increased 0.4% on the month, with big rises in manufacturing (+1.2% m-o-m) and mining, quarrying, and oil and gas extraction (+1.2% m-o-m), while there was a decline in agriculture (-0.3% m-o-m) and construction (-0.1% m-o-m).
Additionally, the rebound in the manufacturing sector follows a sharp fall (-1.9% m-o-m) in December. The service sector increased by 0.2% m-o-m coming from a rebound in wholesale trade (+0.7% m-o-m) and arts, entertainment and recreation (+4.1% m-o-m) and some robust growth in real estate (+0.3% m-o-m), education (+0.3% m-o-m) and accommodation and food services (+0.8% m-o-m). However, there were some declines in transport (-0.2% m-o-m), finance and insurance (-0.1% m-o-m) and professional, scientific and technical services (-0.2% m-o-m).
Overall, St-Arnaud notes that while growth was stronger than expected in January, the details suggest that it could be short lived. He writes, “Roughly two-thirds of the growth over the month can be attributed to the rebound in manufacturing and wholesale, suggesting that the underlying strength of the economy is weaker than indicated by the headline number. Moreover, with these corrections out of the way, growth will likely be weaker in February, because of the weak momentum in the data. We continue to expect that growth in Q1 will be around 1.5% q-o-q ar.”