US Q2 GDP preview: We expect a 2.6% reading - Wells Fargo

On Friday, US Q2 GDP growth data will be released. Analysts from Wells Fargo forecast a 2.6% annualized rate, in line with market consensus and above the 1.1% of the previous quarter.

Key Quotes:

“After another weak start to the year, GDP growth looks to have rebounded in the second quarter. Consumer spending has strengthened in recent months and should provide a sizeable boost to the headline.”

“Outside of the consumer, however, growth remains weak. Business fixed investment will likely be little changed after falling the past two quarters. Residential investment is due for some payback after unseasonably warm weather pulled new construction forward. Inventory growth has also slowed, although the correction that started last summer looks to be nearing an end.”

“We expect GDP to have risen at a 2.6 percent annualized pace in the second quarter, which would bring the year-over-year pace a bit below 2 percent. While a 2 percent pace is expected to continue in the second half of the year, the composition of growth should become more balanced between the consumer and business spending.”