Moderately Slower Growth Rate Expected For US GDP In Q4

Jan 04 12:01 2019 Print This Article

The US expansion remains on track for a moderate deceleration in fourth-quarter GDP growth, based on the median estimate for a set of nowcasts compiled by The Capital Spectator. The good news is that the estimate has been steady in recent weeks.

The median Q4 nowcast remains at 2.7% (seasonally adjusted annual rate), unchanged from the Dec. 18 update and down from Q3’s robust 3.4% rise. Nowcasts are prone to all the usual caveats that accompany efforts to anticipate future economic conditions, but the fact that the median estimate has remained stable is an encouraging sign for assuming that the US economy will close out the final quarter of 2018 with a diminished but still-healthy increase in output.

The outlook for this year’s first quarter and beyond, by contrast, is subject to greater uncertainty, courtesy of several factors, starting with the partial government shutdown – a shutdown that doesn’t appear set to end any time soon. Kevin Hassett, chairman of the White House Council of Economic Advisers, yesterday advised that the shutdown will be a “big negative” on the January employment report. “Our estimate is that GDP in the first quarter could go down by about a tenth if this were to resolve in the next few weeks,” he said on Thursday.

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About Article Author

The Capital Spectator

CapitalSpectator.com is a finance/investment/economics blog that’s edited by James Picerno. The site’s focus is macroeconomics, the business cycle and portfolio strategy (with an emphasis on asset allocation and related analytics). In late-2009, the Eastern Economics Journal named Picerno as one of the nation’s “top economics bloggers”. Picerno is the author of Dynamic Asset Allocation: Modern Portfolio Theory Updated for the Smart Investor (Bloomberg Press, 2010) and Nowcasting The Business Cycle: A Practical Guide For Spotting Business Cycle Peaks (Beta Publishing, 2014). His articles on finance and economics have appeared in a variety of publications and news outlets over the years, including The Atlantic, Financial Advisor, BankRate.com, HorsesMouth.com, and Bloomberg Briefs: Economics. He also pens a daily economics column for the Saxo Group’s TradingFloor.com web site. Picerno has been writing about investing and macroeconomics since the early 1990s at Bloomberg, Dow Jones and other media groups before becoming an independent writer/analyst in 2008. He also offers consulting services on asset allocation and portfolio strategy, the US business cycle, and related data analytics in R and Excel.

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