Saturday, February 28, 2015

U.S. Economy Slows Down to 2.2%

The U.S. economy growth is slower than what was initially thought in the 4th quarter of 2014, since decrease in stockpiling by businesses and a weak trade balance affected the economy.

The country's economic output is up at the rate of 2.2% in the 4th quarter of 2014, last month the initial estimate of was 2.6%. The revision also represented a steep deceleration from the blistering 5% annual rate of growth reported in the third quarter of 2014.

Economists on Wall Street has already expecting the revision even before the announcement, they even expected that it should be at 2%. The Commerce Department released the revision on Friday, it is the 2nd of 3 estimates that are revised as more data comes in. The final estimate will be out by late March.

The cause of the revision is due to slow additions to inventories by businesses than first estimated, removing 0.7% from the headline number for growth even though other underlying components like demand from consumers remained healthy.

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