In what can be heartening news for some, the US economy grew at around 5.9% in the fourth quarter. This is higher than what was reported by the US government last month. This was on the back of better business investment and improved contribution from inventories. Companies like Deere & Co. have shown encouraging results, with sales improving. This has been prompted by companies increasing their spends towards machinery and greater off take by the farm sector. While business expenditure may be spurring US economy growth, consumer spending sentiment is still depressed. This is based on employment figures and with unemployment rate still hovering around the 10% mark, it is tough to see any turn around in the consumer spending sentiment. Most experts are of the view that sustainable and long term growth of the economy will be a factor of the pickup in the labor market. Opinion and outlook is quite mixed in this regard, with many people assuming that labor market would remain stretched till year end.
The US economy shed as many as 20,000 jobs in January, with more than 150,000 jobs being shed in December. The unemployment rate was in the range of 9.7%, which could come down to just 9.5% by year end.