Tag Archives: US GDP growth

With stronger US growth than expected in the fourth quarter, we do not expect a recession in 2019.Q4 2018 GDP growth was healthy at 2.6% quarter-on-quarter (q-o-q) seasonally adjusted annual rate (SAAR), close to the average over the previous three quarters (2.5%). Annual growth for 2018 was 2.9%.A particularly bright spot in Q4 was business investment, led by spending on equipment and software. Such business investment strength is particularly good news for the sustainability of the US...

While we are maintaining our 3% growth forecast for 2019, we have slightly reduced our baseline forecast for 2019.The Trump administration has been stepping up its trade rhetoric further, with concrete increases in trade tariffs already kicking in, and others in the near-term pipeline: tariffs on steel and aluminium came into effect in early June, and there will be 25% tariffs on USD 34 billion of Chinese imports (out of a total of USD505 billion in 2017) from 6 July. President Trump has...

Forthcoming slower US Q1 GDP can be considered temporary and technical.The Bureau of Economic Analysis will release the preliminary estimate of Q1 GDP growth on 27 April. Currently Q1 growth is tracking around 2% q-o-q (annualised), a deceleration from 2.9% in Q4-2017. We think this slowdown is transitory and does not reflect the underlying growth trend; we expect some solid catch-up in Q2.We are marking up our Q2 growth forecast to 3.6% from 3.0%, as we expect both investment and...

While optimistic about this year, the CBO does not believe the pace of growth is sustainable and sees a substantial increase in the fiscal deficit. The Congressional Budget Office (CBO), a bipartisan budget body reporting to US lawmakers, released a fresh 10-year economic and budget outlook earlier this week, incorporating the effects of both the December tax cuts and the March Congressional spending deal.The news is not great. The CBO seems half convinced about the medium-term benefits of...

Volatility in US payroll data has remained low lately. We see limited signs of imminent overheating or slowing in the US.Volatility has picked up significantly on US equity markets lately. But does it reflect higher volatility in US macroeconomic data?So far, not really. Take US payroll data. If one looks at the one-year rolling standard deviation of the monthly data, one can see volatility is still subdued: it now stands at 68,000 (new payrolls/month), which is close to the average since...

The US economy is increasingly reliant on activity in Texas, itself very dependent to oil.Texas, the second state by GDP after California, but better endowed than the latter with oil resources, has become a major driver of US growth, especially since the energy boom of the 2010s. What we’ve learned with the ups and downs of oil prices over the past few years is that high oil prices are great for Texas and therefore positive for the US economy, in spite of the hit to the individual US...

US GDP growth in the third quarter was good, and momentum may be firmer than we expected. There are upside risks to our 2018 growth forecast.US GDP grew 3.0% q-o-q SAAR in Q3 2018, pushing up the y-o-y print to 2.3%. In a word, the US economy is doing fine, although it still lacks sparkle. The impact of August hurricanes was barely perceptible. IT investment was particularly solid, rising 8.6% y-o-y, and consumer spending growth was tepid (up 2.6% y-o-y), with some softness in...

Household formation trends mean the housing sector is unlikely to make a meaningful contribution to US GDP.The recently released Census Bureau’s Annual Social and Economic Supplement (ASEC) brought sobering news for the US housing market: new household formation slowed significantly, to 405,000 in 2016, the lowest level since 2009 (+357,000), compared with 1,232,000 in 2015. In other terms, the number of households grew only 0.3% last year, compared with +1.0% in 2015.In general, household...

After soft GDP in first quarter, we expect a significant rebound in the current quarter. The underlying strength of the US economy remains intact.US GDP growth decelerated from 2.8% in H2 2016 to 0.7% quarter on quarter (q-o-q) annualised in Q1, slightly below consensus expectations (1.0%). However, this weak reading is mainly due to statistical anomalies (growth tends to be lower in Q1) and transitory factors that weighed on consumer spending and stockbuilding. However, fixed investment...

In spite of softness in headline Q4 GDP figure, growth momentum in the US picked up in the second half of 2016 and should be underpinned by fiscal stimulus later this year.US GDP growth decelerated from 3.5% in Q3 to 1.9% quarter-on-quarter annualised in Q4, below consensus expectations of 2.2%. However, this soft reading was mainly due to a reversal of the surge in soybean exports in the previous quarter, while growth in final domestic demand picked up from 2.1% in Q3 to 2.5% in Q4....