The US economy is expected to see a sharp slowdown in growth in the first quarter.
JustinSummary:
Next week's preliminary estimates for first-quarter U.S. GDP growth point to a sharp decline, based on the median of current forecasts calculated by CapitalSpectator.co across multiple sources.
Gross domestic product (GDP) is expected to have grown at a modest 0.7% (real annualized) in the first quarter, according to the median estimate. If this forecast holds true, the economy would slow sharply after the strong 2.4% growth in the fourth quarter. The Bureau of Economic Analysis will release its preliminary estimate of first-quarter GDP on April 30.
Today's revised median forecast extends a series of sharply lowered forecasts for the first quarter in recent weeks. In our previous update, dated April 10, the median forecast for the first quarter was 0.8%.
The most worrying aspect of today's first-quarter data is that it does not yet reflect the severe trade disruptions plaguing the United States and the global economy. In other words, the second-quarter data are expected to provide a clearer picture of how tariffs are impacting economic activity.
The International Monetary Fund discussed the outlook on Tuesday, lowering its growth forecasts for the United States and the world, citing tariffs as a factor. IMF Chief Economist Pierre-Olivier Gourinchas wrote yesterday: "Risks to the global economy have increased, and escalating trade tensions could further depress growth."
Kevin Kang, head of global economic research at Vanguard and chief international economist, sees reason to lower the forecast. “We’re going to see significantly weaker economic growth this year,” he told Yahoo Finance yesterday. He added that there’s a lot of uncertainty surrounding the forecast. “The variance around our forecast is unusually large… We’re in what we call a ‘dance with recession.’ So, while recession may not be our baseline, we’re very close to it.”
Source: James Picerno
To stay updated on all economic events of today, please check out our Economic calendar
Risk Warnings and Disclaimers
You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.
