UK GDP Growth Slows To 1.8% In 2017, Weakest Since 2012

Screen Shot 2018 01 26

Screen Shot 2018 01 26

Growth was 3.2 percent in the third quarter and 3.1 percent in the three months before that.

The acceleration in real GDP from 2016 to 2017 reflected upturns in non-residential fixed investment and in exports and a smaller decrease in private inventory investment. Net exports also subtracted 1.13 percentage points from the GDP growth.

Trump said that because of the tax plan, which had reduced individual and corporate tax rates, Apple had announced it planned to bring $245 billion in overseas profits back to America.

"The annual growth contribution of the services industry has fallen from 2.7 percentage points in 2014 to 1.3 percentage points in 2017, with the industry growing by only 1.6% in 2017 - its weakest growth rate since 2011". While that is an improvement from the 1.5 percent gain in 2016, it is basically the same as the average 2.2 percent growth rate that the USA has seen since the end of the Great Recession.

By the way, do note how the Reuters excerpt above forecasts 3.0 percent growth in 2018, and cites three reasons: A weak dollar, rising oil prices and a stronger global economy. I continue to believe that there is upward potential in that outlook for next year, especially as firms increase their investments. Many economists expect that the tax cuts could help boost growth this year, but that growth will gradually slip back to 2%, where it has hovered since the Great Recession. Durable and nondurable goods spending were jumped 14.2 percent and 5.2 percent, respectively, for the quarter.

This confirms the impression created by recent consumer spending surveys that household finances are under pressure and that it would be unwise to expect any uptick in activity in the near future from Britons splashing out on the high street.

Egypt's former chief of staff arrested, drops presidential bid
Anan's campaign announced the suspension of work on their Facebook page out of fear for their employees' safety. Anan's candidacy coincided with a moment of unusual flux in the top ranks of Egypt's security services.

Mickey Levy is the chief economist for the Americas and Asia of Berenberg Capital Markets, LLC, and member, Shadow Open Market Committee.

Business and government spending were also encouraging. Fixed-asset investment, particularly in real estate and infrastructure, accounts for nearly half of total demand and a 50 per cent share of GDP.

Likewise, federal and state and local government spending increased 3.5 percent and 2.6 percent, respectively, in this report, with government expenditures adding another 0.50 percentage points to top-line growth.

The latest quarterly number was an improvement on the figure of 0.3% seen in each of the first two quarters of 2017 and the 0.4% in the third quarter. That should be a positive for the first quarter of 2018. Imports, which subtract from GDP growth, increased at their fastest rate in more than seven years.

The services sector, which accounts for the bulk of the economy, expanded by 0.6% in the fourth quarter - stronger than the 0.4% rise in the three months to September.

Growth in the fourth quarter was most hindered by a widened trade deficit, as Americans bought more foreign goods than were sold overseas.

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