U.S. Outlook: Growth has slowed — is it transitory or not?
The Q1 preliminary GDP report showed the broad extent of the economic damage from a combination of a rising dollar, drop in oil prices, and another winter for the record books.
For more on this and other economic developments this week, see my full analysis. Highlights are outlined below, followed by a link to the full U.S. Outlook report, delivered on May 1.Key observations:
- Consumer spending has remained moribund despite fleeting spurts of rapid durable goods spending.
- Even more troubling is the sharp drop in business investment in the first quarter.
- A consumer spending rebound wil be the key to a stronger second-half economy.
- We lowered our real GDP growth estimate for 2Q to 2.0% from 2.9%.