Next week, on Thursday the first estimate of US Q3 GDP growth data will be released. Analysts at Wells Fargo forecast the economy expected at an annualized rate of 2.8%, after two negative quarters. They still see a recession next year.
Key Quotes:
“After two consecutive quarters of negative growth, we forecast the U.S. economy expanded at an annualized rate of 2.8% in the third quarter.”
“We anticipate underlying demand measures remained solid, and we have bumped up our forecast for real personal consumption expenditures (PCE) on the recent retail sales data for September. We now look for real PCE to rise at a 0.8% annualized pace in Q3 (+0.6% previously). Higher consumption suggests modestly more import growth as well, though net exports still look to provide a considerable boost of over three percentage points to the headline GDP figure as import growth still broadly reversed during the quarter.”
“We still anticipate a mild recession to take place next year. But as we detail in our latest monthly report, recent momentum makes the start of recession by the beginning of the year less likely. We now see a downturn happening a bit later, beginning in the second quarter rather than the first.”
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