US: Economy likely to grow at 2.3% in Q4 - Westpac

Analysts at Westpac note that the US GDP has had a tumultuous year, a gain of 3.5% annualised in Q3 following growth of 1.4% and 0.8% in Q2 and Q1 respectively.

Key Quotes

“Annual growth remains soft at 1.6%yr, while the six-month annualised pace sits a little above potential, at 2.3%.”

“To September, household consumption growth held up, running at a 2.9% annualised pace. However, business investment has been persistently weak through 2016, while dwelling investment and government spending were broadly flat.”

“There is a heightened degree of uncertainty over the Q4 outcome. The Atlanta Fed's nowcast points to a 2.8% annualised gain, but the NY Fed's estimate is just 1.9%. To our mind, a more modest gain for household consumption and a continuation of the trends in other key sectors is most likely to result in growth of around 2.3% annualised. To this figure, the risks are likely skewed (modestly) to the upside.”