28 Oct 2014
Flash estimate for 3Q14 GDP growth at 2.5-3.0% - ING
FXStreet (Łódź) - Rob Carnell from ING suggests that the US GDP figure for Q3, due out on Thursday, should come in close to 3%.
Key quotes
"We have been maintaining in the face of all this volatility, that the US was growing still at its underlying trend rate, which we maintained was about 2.5-3.0%, and our preliminary estimate for 3Q14 GDP growth suggests that it will come in at about this level."
"In terms of the underlying components, we anticipate consumer spending to grow at about 2.0-2.5%. The quarter started on a very soft note, and despite a bounce in spending in August, September retail sales weakness may be only partly offset by falling price levels, and so real consumer spending is not likely to be earth-shattering. Lower gasoline prices should give this a very hefty upwards nudge in 4Q14, however."
"Business investment in equipment and intellectual capital bounced nicely in 2Q14, and capital goods orders and shipments trends imply that this healthy trend was maintained in 3Q14. The same cannot be said for structures spending, or residential spending, and business inventories will likely revert to a slight drag from the positive contribution they delivered in 2Q14."
"Net exports are always a bit of a wildcard given the lack of September trade data at the time of the first GDP release. But on the basis of favourable trends in the US trade balance, we may see net trade offsetting some of the weakness in inventories."
"Totting all of this up, we get a figure of 2.8%, though this is of course subject to all the usual uncertainties associated with preliminary GDP estimates and we would suggest a +/- 0.5ppt margin of likely error for this estimate."
Key quotes
"We have been maintaining in the face of all this volatility, that the US was growing still at its underlying trend rate, which we maintained was about 2.5-3.0%, and our preliminary estimate for 3Q14 GDP growth suggests that it will come in at about this level."
"In terms of the underlying components, we anticipate consumer spending to grow at about 2.0-2.5%. The quarter started on a very soft note, and despite a bounce in spending in August, September retail sales weakness may be only partly offset by falling price levels, and so real consumer spending is not likely to be earth-shattering. Lower gasoline prices should give this a very hefty upwards nudge in 4Q14, however."
"Business investment in equipment and intellectual capital bounced nicely in 2Q14, and capital goods orders and shipments trends imply that this healthy trend was maintained in 3Q14. The same cannot be said for structures spending, or residential spending, and business inventories will likely revert to a slight drag from the positive contribution they delivered in 2Q14."
"Net exports are always a bit of a wildcard given the lack of September trade data at the time of the first GDP release. But on the basis of favourable trends in the US trade balance, we may see net trade offsetting some of the weakness in inventories."
"Totting all of this up, we get a figure of 2.8%, though this is of course subject to all the usual uncertainties associated with preliminary GDP estimates and we would suggest a +/- 0.5ppt margin of likely error for this estimate."