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RESEARCH & INSIGHTS
In our January 2014 commentary, we highlighted “surprising strength in consumer spending and exports, building momentum in business shipments and production” in last year’s third quarter and our expectations these trends would continue in the fourth. We raised our estimate of fourth quarter GDP to a range of 2.5 to 3 percent from 2 to 2.5 percent. Actual fourth quarter GDP growth was 2.6 percent despite large reversals in business inventory investment and housing from the third quarter. In addition, fourth quarter GDP was affected by the onset of what became a severe winter. While full year 2013 GDP was 1.9 percent as measured from year-year annual levels, GDP growth in the second half of 2013 increased at an average annual rate over 3 percent. Read the full article here
Is This the Breakout?
Despite the negative implications of the government shutdown in October, businesses and consumers ignored the Washington brinkmanship and led a huge economic surge in the third quarter of just over four percent annualized GDP growth. Business inventory accumulation accounted for over 1.6 percent of the total growth. Nonetheless, surprising strength in consumer spending and exports and building momentum in business shipments and production accounted for the unexpected expansion in the third quarter. These trends continue in the fourth quarter leading us to raise our expectations for fourth quarter and full year 2013 economic growth to a range of 2.5 to 3 percent. Click to read more
United States Economy on Hold
After the economy rose in the summer, businesses and consumers entered the third month of the third quarter cautious due to uncertainty regarding fiscal deliberations in Washington. That caution was validated when Congress failed to enact a new budget for the current fiscal year, thus shutting down the government on October 1, 2013, and barely avoiding a United States debt default on October 17. Click to read more
GDP Growth Decelerates in Second Quarter – is the Economy Weakening?
A Statistically Weak Second Quarter
The second quarter of 2013 is now expected to show slower economic growth below the revised 1.8 percent reported in the first quarter. The latter was a dramatic downward revision from the 2.4 percent growth rate previously reported. Continuing the trends seen since the end of the recession, strength in one quarter has led to retrenchment in a subsequent one and this year’s second quarter at first glance appears to follow the same script. After surging out of last year’s fourth quarter, economic growth momentum carried through January and February before weakening in March. That weakness continued through April and much of May before signs of economic strength began appearing just before the Memorial Day holiday. Click to read more
Economy Outperforms Expectations But…
A Surprising First Quarter
The first quarter of 2013 is shaping up to be stronger than early expectations despite what appears to be some weakening in March. Real gross domestic product is expected to grow in a range of 2% to 2.5%. This is far better than the 0.4% increase registered during the fourth quarter of 2012 and far stronger than the 1% projections entering 2013. Despite uncertainties from Washington regarding the federal budget and the enactment of higher taxes, consumers and businesses combined to “shake off” these “headwinds” and increase their spending during January and February. Click to read more