U.S. Outlook: Fingers crossed, we need a bounce in GDP growth

Scott Anderson
Posted by Scott Anderson
Chief Economist

This morning’s second estimate for Q1 GDP growth didn’t do much to alter the original view that the U.S. economy got off to a rough start this year.

graph showing drop in G10 Surprise Economic INdexThe revisions increased the headline GDP growth rate to 1.2% annualized in Q1 from an originally reported 0.7% gain.

For more on this, see highlights of my report below, followed by a link to the full U.S. Outlook, delivered on May 26.

Key observations:
  • The May FOMC minutes, released earlier this week, shouldn’t dissuade from further Fed rate hikes or the start of Fed balance sheet reductions before year end. But much depends on a second quarter bounce in activity.
  • Housing, real estate, and personal/household data have missed more regularly over the past month, while retail/wholesale and industrial sectors continue to underperform expectations.
  • If the consumer spending recovery doesn’t materialize, watch out for falling growth forecasts.

Click here to read my full report.

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