U.S. Outlook: Is weaker GDP consistent with the sentiment?

Posted By Scott Anderson In Economic Outlook | No Comments

The weak growth in GDP for Q1 2014 was a bit of a surprise for many economists this week, including me.

Bar graph of quarterly GDP performance of last two years and forecast of next two years [1]Despite overall weakness in the quarter, we’re seeing positive indicators of growth going forward, particularly in consumer activity.

For more on the latest economic developments to watch, see higlighhts of my weekly economic analysis below, followed by a link to the full U.S. Outlook report [2], delivered on May 2, 2014.

Key observations:
  • Weak construction spending report raises the odds that Q1 GDP could be revised lower.
  • The largest component of GDP, personal consumption, grew at solid 3.0 percent annualized rate in Q1.
  • U.S. consumers continued to spend despite the freezing winter weather in the first quarter.
  • We expect continued momentum in consumer spending throughout 2014.
  • Velocity of money in the economy has fallen to a record low, doing little to offset deflationary pressures or generate real economic growth.

Click here to read my full report [2].

 


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URL to article: https://changematters.bankofthewest.com/2014/05/02/u-s-outlook-weaker-gdp-consistent-sentiment/

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[1] Image: http://blog.bankofthewest.com/wp-content/uploads/2014/05/graph_GDP_050214.jpg

[2] full U.S. Outlook report: http://blog.bankofthewest.com/wp-content/uploads/2014/05/BankoftheWest_USOutlook_05_02_14_.pdf

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