US Economy Still Growing Strong Despite External Risks
Recent data releases continue to reinforce that the US economy is maintaining a healthy rate of growth, despite the slew of recent external risks. The services sector in the US expanded at the fastest pace in a year during February, despite the coronavirus outbreak which had dented the outlook for the global economy.
The ISM non-manufacturing activity index soared to 57.3 in February from 55.5 in January, the highest level seen since February 2019. In addition, the ADP report which released in the previous session revealed that private payrolls witnessed a greater than expected rise in February, lending additional support to economic growth in the US.
However, in order to combat the possible damage from the coronavirus outbreak, the Fed had cut interest rates by 50bp on Tuesday over the rising number of cases being reported internationally. Economists continue to maintain hope that the US economy remains robust and is well prepared for any possible upcoming slowdown on account of the spread of the virus.
Just like in the rest of the world, the rapidly spreading coronavirus can impact US’s economy by causing supply chain disruptions and lowering demand for exports. The services sector could be impacted if tourism takes a hit as a result of the travel restrictions being imposed by governments worldwide.
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