Daily News 12/23/14

December 23, 2014

Tuesday – December 23

Economic growth across the U.S. rose to its fastest pace in 11 years led by a surge in consumer spending. The Bureau of Economic Analysis (BEA) reported on Tuesday that the final reading on third quarter 2014 Gross Domestic Product (GDP) rose by a blistering 5.0%, up from the prior reading of 3.9% and an initial estimate of 3.5%. Each quarter the BEA releases three readings on GDP. The data revealed that consumer spending rose by 3.2%, led by purchases of durable goods. In addition, business investments also saw a sharp rise.

Consumer Sentiment in the U.S. jumped to its highest level in more than seven years led by lower gas prices coupled with better job and wage prospects. The University of Michigan’s Consumer Sentiment survey came in at 93.6, above the November reading of 88.8. The survey’s director said, “consumers held the most favorable long-term prospects for the national economy in the past decade.”

The Dow Jones Industrial Average hit a new milestone on Tuesday as the 118 year Stock index topped 18,000 for the first time in its history. The Dow surged after the strong results from the Gross Domestic Product report. The closely watched index hit a multi-year low of 6,547 back on March 9, 2009 at the height of the Great Recession. But since then, the meteoric rise has been fueled by a recovering economy, job market along with a stabilizing housing sector. In addition, the U.S. Federal Reserve Bank has also been instrumental in the rising Stock markets due to its various stimulus programs.