U.S. Outlook: Uneven growth with whiffs of higher prices

Scott Anderson
Posted by Scott Anderson
Chief Economist

This week’s U.S. Trade report for March revealed an even more lopsided trade performance than was estimated in last week’s Q1 GDP report.

Graph showing the downward movement of the trade deficit.Factoring in the March trade numbers, our current estimate of Q1 Real GDP dropped below stagnation into contraction territory (-0.3% annualized).

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 8.

Key observations:
  • Business investment is likely to remain weak at least for another quarter, while the U.S. trade deficit will be an even bigger drag on growth this year.
  • The solid bounce in global crude oil prices is likely helping to feed expectations in global bond markets that deflation will prove temporary.
  • More signs are popping up in the real economy that U.S. core inflation is likely to rise from here.
  • Market and Fed expectations around future inflation appear to be aligning nicely, keeping a September rate hike in sight.


Click here to read my full report.


Reminder: All comments are moderated prior to publication and must follow our Community Guidelines.

Submit an Idea

[contact-form-7 id="32" title="Share An Idea"]

You are leaving the Bank of the West Change Matters site. Please be aware: The website you are about to enter is not operated by Bank of the West. Bank of the West does not endorse the content of this website and makes no warranty as to the accuracy of content or functionality of this website. The privacy and security policies of the site may differ from those practiced by Bank of the West. To proceed to this website, click OK, or hit Cancel to remain on the Bank of the West Change Matters site.