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Friday, 29 April 2016
US Economy Just Sputtering Along
U.S. economic growth braked sharply in the first quarter to its slowest pace in two years as consumer spending softened and a strong dollar continued to undercut exports, but a pick-up in activity is anticipated given a buoyant labor market.
Gross domestic product increased at a 0.5 percent annual rate, the weakest since the first quarter of 2014, the Labor Department said on Thursday in its advance estimate. Growth was also held back by businesses stepping up efforts to reduce unwanted merchandise clogging up warehouses.
Cheap oil, which has pressured the profits of oil field companies like Schlumberger (SLB.N) and Halliburton (HAL.N), remained a drag, sending business spending tumbling at its quickest pace since the second quarter of 2009, when the recession ended.
Almost all sectors of the economy weakened in the first quarter, with housing the lone star.
"The economy essentially stalled in the first quarter, but that doesn't mean it is faltering," said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania. "Some of the restraints to growth are dissipating. Growth is likely to accelerate going forward."
Otto Energy Ltd., a company with headquarters in Australia, said it made an oil discovery in the Gulf of Mexico that was productive enough to keep drilling. The company said it ran through columns of oil at its SM-71 well in the Gulf of Mexico and decided to deepen its drilling activity to ensure the entire targeted region will be evaluated. The cost to drill deeper, the company added, is within the original spending target. Matthew Allen, the company’s managing director, said he was “very encouraged” by the results so far. Otto Energy describes the prospect as part of a regional “low cost, high-chance-of-success” opportunity in […]
Posted by Unknown at 08:00
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