Tag Archives: US growth forecast

December’s US tax cuts – which saw corporate taxation reduced particularly sharply – are being echoed in signs that ‘animal spirits’ are finally kicking in. Both set the stage, in our view, for higher US growth, in large part driven by greater investment. We therefore upgrade our 2018 US growth forecast from 2.0% to 3.0%. We forecast that real non-residential investment growth will accelerate to 7.0% in 2018, up from an...

The recent US tax cuts and abundant signs of increased corporate investment have led us to raise our forecast for growth and inflation in the US this year and next.December’s US tax cuts – which saw corporate taxation sharply reduced– are being echoed in signs that ‘animal spirits’ are finally kicking in. Both set the stage, in our view, for higher US growth, in large part driven by greater investment. We have raised our 2018 US growth forecast to 3.0% (from a previous forecast of 2.0%), as...

With the approval of the Senate tax bill in the early hours of Saturday 2 December, a key step has been taken toward tax cuts. The next chapter in the process is to reconcile this version with the House of Representatives’ tax bill, most likely in a ‘conference committee ’ from which a final version will emerge. Various lobbies have been taken by surprise by the speed with which tax legislation has moved forward in...

Approval of the Senate tax bill paves the way for a final congressional bill that leads to tax cuts. Although unchanged, we now see some upside risks to our 2018-19 scenario for US growth and inflation. With the approval of the Senate tax bill in the early hours of Saturday 2 December, a key step has been taken toward tax cuts. The next chapter in the process is to reconcile this tax bill with the House of Representatives’ version, most likely in a...

Global growth, post-hurricane reconstruction and higher oil prices are all provided a boost to the US growth outlook. But uncertainty still hangs over tax cuts and the Fed.We are raising our US GDP forecast for 2017 (+0.1 percentage point to 2.3%) and 2018 (+0.3 point to 2.0%) on the back of stronger momentum in Q4 2017. Accelerating global growth is a tailwind for the US economy – as seen in the recent sharp pick up in exports, particularly to emerging markets. Reconstruction efforts in the...

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...

Just-released figures lead us to revise our forecasts for US spending and inflation.Real consumer spending increased by just 0.1% month-on-month in May. However, Q1 and April consumption figures were revised higher. The overall result was that between Q1 and April-May, US personal consumption grew by a strong 3.2% annualised. The strong bounce back in consumption growth expected has been confirmed, so that our forecast of 2.7% growth in consumer spending for Q2 overall now looks too low. We...

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....

3Q GDP growth was flattered by a temporary surge in soybean exports, while consumer spending was disappointing. However, our 2016 and 2017 growth forecasts remain unchanged.On the back of a temporary surge in exports, real US GDP grew by a strong 2.9% in Q3, above consensus expectations. Our yearly average forecasts that US GDP will grow by 1.5% in 2016 and 2.0% in 2017 remain unchanged. The robust rate of expansion in Q3 needs to put in proper context. First, it is partly linked to a...

Disappointing GDP growth in the second quarter and downward revisions for the previous two quarters mean we are revising our GDP forecast for the US. US GDP grew by a surprisingly soft 1.2% (quarter on quarter, q-o-q, annualised) in Q2, well below consensus expectations of 2.5%. Moreover, growth in Q4 2015 and Q1 2016 was revised noticeably lower. Year-on-year growth in Q1 was revised down from 2.1% to 1.6%. In Q2, consumer spending grew by a strong 4.2% and final demand by a healthy 2.0%....