U.S. Economic Outlook (April 30, 2019)
U.S. Economic Outlook
April 30, 2019
Economic growth accelerated sharply in the first quarter thanks to strong net exports and a buildup of inventories, which more than offset slowing consumer spending and fixed investment growth. Imports contracted largely due to frontloading in Q4, in anticipation of tariff increases on China, while the inventory surge was partly related to softer demand, particularly for vehicles. Shutdown effects, on the other hand, dragged on growth. Nevertheless, monthly indicators for March suggest a rebound in both private investment and consumption momentum at the end of the quarter. Turning to Q2, the trade and inventory boost should unwind and weigh on growth, while conversely, delayed private and public spending due to the shutdown will provide support. Overall, consumer spending will likely gain steam, but weak investment in the residential property market remains a concern.
United States Economic GrowthEconomic momentum will cool this year as a variety of factors weigh on activity. Higher interest rates—despite the recent halt of the Fed’s tightening cycle—and slower global growth are notable headwinds. Moreover, trade uncertainty should persist this year—even in the event of a trade deal with China—while fiscal stimulus effects will fade, further dampening growth. FocusEconomics panelists see GDP expanding 2.4% in 2019, which is unchanged from last month’s estimate, and 1.7% in 2020.
United States Economy Data