U.S. Market Indicators

While the Employment Situation and PCE Index are important U.S. market indicators for the Federal Reserve, U.S. gross domestic product data also plays a role in determining monetary policy.

In the Commerce Department’s most recent GDP report the Bureau of Economic Analysis (BEA) reported a 3.2% fourth quarter increase in U.S. GDP from the third quarter of 2013. This increase followed a 4.1% quarterly increase in the third quarter. However, for the year the BEA reported a 1.9% annual GDP increase.

In the fourth quarter Personal Consumption Expenditure and Gross Private Domestic Investment increased 3.3% and 3.4% respectively while Government Consumption Expenditures and Gross Investment decreased 4.9%.

Personal Consumption Expenditure had the greatest increase in Goods adding 4.9% while Services also increased 2.5%. In Gross Private Domestic Investment Fixed Investment products increased 0.9% and Residential decreased 9.8%.

Federal Government Expenditures and Investments decreased 12.6% in the fourth quarter with National Defense decreasing 14%. State and Local Government Expenditures increased 0.5% in the fourth quarter.

While the national unemployment rate has decreased to 6.6% and the PCE Index inflation rate is 1.2%, the GDP report showed signs of slower improvement in the underlying gross domestic product data.