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