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13 Mar 2015
US: slow growth in Q1 but outlook still solid – Danske
FXStreet (Barcelona) - Senior Analyst at Danske Bank, Signe Roed-Frederiksen, revises down the US GDP forecast for Q1 from 2.7% to 1.7% qoq, but sees the backdrop for growth as still favourable.
Key Quotes
“The latest stream of soft data from the US prompts us to revise down our GDP growth forecast for Q1 to 1.7% q/q AR from 2.7% previously. For the year as a whole, we now expect GDP growth of 2.8%, down from 3.0%.”
“Following yesterday’s retail sales report for February, we forecast private consumption growth at 2.8% q/q AR in Q1, assuming some rebound in March spending from the weather-induced weakness in February. This is well below our previous expectation of 3.4% q/q AR private consumption growth this quarter.”
“That said, real retail sales have actually not been that weak lately and it does seem that consumers have spent some of the money saved due to lower oil prices.”
“In January, real retail sales growth was 8.9% annualised over three months, but after the weak February data, the growth rate has come down closer to 4%.”
“We expect a rebound in the coming months and continue to look for private consumption growth around 4% q/q annualised in Q2.”
“As in Q1 last year, weather seems to have been an important factor restraining economic activity lately. The backdrop for growth is still favourable in our view though.”
“The stronger US dollar will likely hold back exports this year, but the negative impact on GDP is largely offset by the continued low oil price.”
Key Quotes
“The latest stream of soft data from the US prompts us to revise down our GDP growth forecast for Q1 to 1.7% q/q AR from 2.7% previously. For the year as a whole, we now expect GDP growth of 2.8%, down from 3.0%.”
“Following yesterday’s retail sales report for February, we forecast private consumption growth at 2.8% q/q AR in Q1, assuming some rebound in March spending from the weather-induced weakness in February. This is well below our previous expectation of 3.4% q/q AR private consumption growth this quarter.”
“That said, real retail sales have actually not been that weak lately and it does seem that consumers have spent some of the money saved due to lower oil prices.”
“In January, real retail sales growth was 8.9% annualised over three months, but after the weak February data, the growth rate has come down closer to 4%.”
“We expect a rebound in the coming months and continue to look for private consumption growth around 4% q/q annualised in Q2.”
“As in Q1 last year, weather seems to have been an important factor restraining economic activity lately. The backdrop for growth is still favourable in our view though.”
“The stronger US dollar will likely hold back exports this year, but the negative impact on GDP is largely offset by the continued low oil price.”