Expect US economy growth at 2-3% in H2FY14: UBS Securities

The US jobs report for May showed additional 175,000 jobs. The numbers cheered Wall Street.

In an interview to CNBC-TV18, Kevin Cummins, the US Economist at UBS Securities said that the numbers were in line with the consensus and were not surprising. On the US economy, he expects the economy to have an accelerated and a 'decent' growth rate of 2-3 percent on the gross domestic product (GDP). Also read: Why positive US non-farm payrolls may be taken as negative Below is the edited transcript of his interview to CNBC-TV18. Q: What you have made of jobs number and the jobless rate which was ticking up slightly on Friday? A: The jobs report did not much surprise. Payrolls rose 175,000 which were in line with the consensus. There was a revision two months prior to that. But nothing changed the needle on payroll growth. Jobs gain over the last three months has averaged a 155,000. Over the past six months, they were close to 200,000. The unemployment rate did edge up. There was a pickup in the labour force participation. That potentially could be suggesting a bit more optimism among jobs seekers. But household employment increased over 300,000 on the month. On unrounded basis, the unemployment rate was 7.555 percent. So, it barely edged up 7.6 percent. It is still a relatively high-level in the US but it is down from a peak of about 10 percent. Q: What does this mean for US economy prospects? In the second half of this year many people expected a better growth than the first half of the year. We have just begun the second half. What kind of tone does this set? A: The big question in the US is the sort of fiscal drag in the second half. We do not expect that big of a drag due to the sequestration. The plan spending cuts factored into the US budget. So, we are looking at a decent growth in the second half of this year in the 2-3 percent range on gross domestic product (GDP). Since the recovery began a few years ago; GDP has evinced at about 2 percent pace. Therefore, a bit more of acceleration towards the second half of the year shall be seen. We think the worries about the sequestration a bit overdone.