US: Strong growth to continue - NBF

Krishen Rangasamy, Research Analyst at NBF, suggests that a fifth consecutive quarter of above-2% real GDP growth is in the cards for the U.S. economy.

Key Quotes

“Consumption spending seems to be responding in early Q2 to the boost to disposable incomes provided by a healthy labour market and personal income tax cuts. Investment remains strong, coinciding with elevated business confidence.”

“All in all, the data so far does nothing to change our view that U.S. real GDP growth will be near 3% this year, i.e. well above potential. Rising inflation pressures over the near term do not mean U.S. monetary policy will become overly aggressive. The impact of higher oil prices is transitory while the persistence of low wage growth continues to cast doubts about whether inflation can be sustained near the Fed’s 2% target.”