US GDP Preview: Forecasts from eight major banks, strong rebound to break two quarters of negative growth

The US Bureau of Economic Analysis will release its first estimate of the third-quarter Gross Domestic Product (GDP) on Thursday, October 27 at 12:30 GMT as we get closer to the release time, here are forecasts from economists and researchers of eight major banks regarding the upcoming growth data. 

The US economy is forecast to grow at an annual rate of 2.4% in the third quarter following the 0.6% contraction recorded in the second quarter.

RBC Economics

“We expect US GDP increased 1.8% in Q3 – boosted by a surge in net trade and modest growth in consumer spending offset partially by weaker residential investment and a pull-back in inventories.”

SocGen

“We calculate a 3% gain for real GDP, the key economic release of the week. We think that it could be even higher. What does that do for recession calls? Temporary reconsideration is our answer. Companies are becoming more conservative as compensation pressures build.”

Deutsche Bank

“We expect real growth to rebound to 3.0% from Q2's -0.6%.”

NBF

“Growth likely turned positive again in the quarter but might still have suffered from a depletion in inventories and a sharp drop in residential investment. The expansion of household spending, meanwhile, might have continued to slow. We expect a strong contribution from international trade, as real exports soared and real imports shrank. Our call is for a 2.5% annualized expansion.”

CIBC

“Our forecast for a 2.0% annualized advance in GDP in Q3 is partly representative of that series playing catchup with the GDI data that showed growth in the first half of the year. However, the slowing trend in the labor market suggests a moderation in growth ahead, as interest rates continue on a sharply higher trajectory. Still, the restocking of inventories as supply chain issues fade will help prevent a contraction in growth in the final quarter of the year. We’re broadly in line with the consensus forecast and market reaction should therefore be limited.”

Citibank

“After two-quarters of negative GDP growth through the first half of this year, we expect a bounce back with 2.8% real GDP growth in Q3. However, after private final domestic demand was somewhat surprisingly flat in Q2, Q3 is likely to see only a modest rise.”

Wells Fargo

“After two consecutive quarters of negative growth, we forecast the US economy expanded at an annualized rate of 2.8% in the third quarter.”

TDS

“We expect the first estimate of GDP in Q3 to show a strong rebound in growth at 3% annualized QoQ from a 0.6% annualized QoQ decline in Q2. This would mainly be owing to a strong recovery in net exports.”