What to expect from the economic growth numbers from the US due 28 February 2019
Via Citi:
Q4 growth is setting up to be very strong
- an unexpected narrowing in the trade balance in November
- Our Q4-18 GDP tracker currently stands at 2.5%
However, Q1 growth is likely to slow as tighter financial conditions and the government shutdown exert a drag
- This is by now well expected in markets and between these factors and potential residual seasonality we think investors (and the Fed) will stay in wait-and-see mode until a clearer picture emerges in Q2
RBC:
- A downgrade to consumer spending on the heels of one of the uglier retail sales reports in years (Dec control retail sales tanked -1.7% m/m) led to a notable mark-down to our 4Q GDP tracking recently. Indeed, we have baked in just a 2.0% q/q annualized advance for topline growth.
- Real personal consumption should still look quite healthy at about 2.8% (but again, down sharply from a tracking near 4% a few weeks ago).
- Capex should also look decent at about 5%, as core durables shipments closed out the year with a nice 0.5% sequential bump in Dec.
- Pulling down growth are likely to be trade and inventories, which are poised to subtract nearly 1ppt from the headline. What this means is that beneath the surface this should still be a rather solid GDP report, with final sales to private domestic purchasers (which excludes inventories and flips imports and export, i.e., a better gauge of domestic demand) near 3%.
