US: Q1 GDP likely to surge by 1.6% - Westpac

The research team at Westpac, explains that in Q4, US GDP disappointed expectations, coming in at 2.1% annualised as the consumer was solid and residential investment bounced back after a weak six months, but business investment was lacklustre.

Key Quotes

“Had it not been for inventories, the headline outcome would have been subtrend. Come 2017, there were expectations that growth would firm, particularly given the rapid rise of consumer and business confidence. However, partial data points to this not being the case. The market is now forecasting annualised growth only marginally above 1%. We are more positive at 1.6%.”

“A softer consumer and still subdued business investment are the key themes. Inventories should subtract. Note that the nowcasts point to risks being greater than normal.”