Trusted performance.  Lasting value.

Looking Up: GDP Hits 5% in 3rd Quarter

GFOA Newsletter

January 8, 2015

U.S. gross domestic product grew an annualized 5% in the third quarter, raising hope that the economic recovery is picking up momentum, according to the Washington Post. The expansion, which is 1.1 percentage point better than the government’s previous estimate, marks the fastest quarterly growth rate since 2003. But we shouldn’t necessarily expect smooth sailing in 2015, according to Fortune: “The economy is certainly better than it was just a year ago. But does it really feel 5% good? So far this year, the U.S. labor market has created an average of 240,000 jobs a month. That’s impressive, but it’s not 5% impressive. An economy growing consistently at 5% would be creating more like 575,000 jobs a month. We are a considerable distance away from that.” A major contributor to the third quarter GDP growth figure was business from abroad, the Fortune article reports. “A smaller trade deficit—more exports and fewer imports—added 0.8 percentage points to GDP in the third quarter, or nearly 20% of the growth. It’s hard to believe the U.S.’s good trade news will continue, especially once we get into 2015.”

Managing an investment portfolio in today’s volatile financial markets requires sophisticated financial tools.