U.S. GDP Growth Is Expected To Rebound In Q2

U.S. economic growth in the second quarter is widely expected to rebound after Q1’s stall-speed rise of just 0.5% (seasonally adjusted annual rate). The question is how much a rebound will we see when the Bureau of Economic Analysis (BEA) publishes this year’s “advance” Q2 GDP report on July 29?

It’s still early in the quarter and so there’s a wide range of guesstimates. The good news is that most forecasts currently project a round of improvement. It’s anyone’s guess if those estimates will hold up as the remaining hard data for Q2 rolls in over the next two months. Meantime, let’s get up to speed on the crowd’s outlook at the moment.

The Wall Street Journal’s mid-May survey of economists anticipates Q2 GDP growth will revive to 2.2% (based on the average estimate). The Atlanta Fed’s May 17 nowcast is even higher at 2.5%. Goldman Sachs yesterday went further, raising its Q2 growth estimate to 3.0% after the government reported a smaller-than-expected widening of the trade deficit in April. By contrast, the dismal scientists at BMO Capital are looking for a relatively weak rebound of just 1.4%, as of May 20. The New York Fed’s May 20 nowcast isn’t much stronger at 1.7%. Note, however, that PMI survey data for May translates into hardly any revival at all for Q2 growth. Markit Economics is projecting a fractional increase in growth to just 0.7%, the firm advised yesterday.

Meantime, the Capital Spectator’s average projection for several econometric estimates is also 1.7% at the moment.

As updated estimates are published, based on incoming economic data, the chart below tracks the changes in the evolution of The Capital Spectator’s projections.