Two things stimulated the American economy more than expected. January of 2016 proved to be the highest consumer spending month in 8 months. The spending grew by half a percentage and consumer spending accounts for about two thirds of the economic activity in America. And, the second thing that caused stimulation was that there was not as much of a slow down in the growth of the economy during the last quarter of 2015 as was expected. And even though the growth of the economy did still slow slightly, the increased spending should lift the growth significantly. These facts and figures were included in a recent article by the New York Times.
But the article reported on the even bigger news that the gross domestic product grew at 1 percent annual growth in the fourth quarter. While this is not the 2 percent growth that was seen during the third quarter, it is also higher than the .7 percent that was expected for the fourth quarter. It ended up being higher than expected because the downturn in business stockpiling was not as bad as the government thought it would be.
Some other numbers that are closely being watched are inflation and interest rates. The Federal Reserve has an inflation target of 2 percent in annual price increases. The inflation rates also help the Federal Research to know when to raise interest rates. As of December, the inflation had increased by .7 percent. In January, this went up to 1.3 percent. Due to price increases, the Federal Reserved, in December, was forced to raise a key rate by a quarter of a point from where it had been at a record low. The Federal Reserve might be incentivized to move interest rates to higher levels in a shorter period of time, even though the economic turbulence at the beginning of 2016 made economists bring down the potential rate hikes from 4 to 2.
One firm that pays attention to the forecast provided by economists and announcements made by the Federal Reserve is Madison Street Capital. This investment banking firm was founded in 2005 and they specialize in middle market companies. The firm provides a vast array of services in five keys areas: corporate advisory, valuation for financial reporting, business valuation, financial opinions and asset management industry focus. The firm also works in a variety of industries around the world, including transportation, agriculture, oil and energy, consumer retail, manufacturing and aviation, among many others. MSC has helped to arrange mergers between a variety of companies, including, FaabRol Systems, Inc and Aveva Group PLC, Hatch Chile Company and Farragut Capital Partners, and BB7 and Woodlawn Partners.
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