All Posts Tagged: U.S. economy

U.S. Outlook: Private inventories — A GDP growth wild card

Scott Anderson
Chief Economist

Rising business inventory levels have been boosting U.S. GDP growth in recent quarters.Aerial View Of Container port

The average increase in real private inventories doubled from 2017 to 2018, from $22.5 billion per quarter annualized on average to $45.0 billion per quarter annualized in 2018, according to data from the Bureau of Economic Analysis.

Wholesale inventories of computers, machinery, and automotive have climbed 15.6%, 13.7%, and 9.5% respectively from a year ago.

For more on this, see highlights of my report below, followed by a link to the full U.S. Outlook, delivered on April 12.

Key observations:
  • If the first quarter of 2019 is any guide, the pace of business inventory building appears to be on track to double again in 2019.
  • The annualized change in real private inventories in the first quarter is likely to exceed $110 billion.
  • After lackluster private inventory growth in 2016 and 2017, real private inventories jumped by $89.8 billion annualized in Q3 and $96.8 billion annualized in Q4.
  • The swing from the second quarter’s $36.8 billion decline was a whopping $126.6 billion, adding 2.3 percentage points to the third quarter’s GDP growth alone.
  • If this inventory building tails-off quickly in the quarters ahead, U.S. GDP growth could very easily surprise on the downside.

Read my full report.

Chart showing Pace of Inventory Change_41219

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U.S. Outlook: Will consumers keep spending over the holidays?

Scott Anderson
Chief Economist
Graph showing growth, declines in various retail sales categories

The retail sales data through October show a consumer who is ready and willing to spend this holiday season.

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U.S. Outlook: Consumers remain a confident bunch

Scott Anderson
Chief Economist
Graph showing sharp increase in consumer confidence between Oct 2009 and June 2017

It’s been a long time coming, but more consumers are finally riding the wave of plentiful job opportunities, rising incomes, and improving net worth. Nowhere is this better reflected than in the current readings of the Conference Board’s Consumer Confidence Index. Consumer confidence has only been at these nose‐bleed levels a handful of times over the last 40 years, notably […]

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Investment Insights: The muddy waters blues

Wade Balliet
Posted by Wade Balliet
Investment Strategy
A container ship in the harbor in Asia

Mixed U.S. economic data and political upheaval have created muddy waters that are difficult to navigate.

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U.S. Outlook: Global malaise

Scott Anderson
Chief Economist
Graph showing up and down trends in China exports over past several years.

The global economy continues to be one of the biggest risks for the U.S. economy over the near term.

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