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.
