The U.S. economy is expanding at a 3.8 percent annualized rate in the third quarter, the Atlanta Federal Reserve’s GDPNow forecast model showed on Tuesday, following the August payroll data released last Friday.
This was slower than the 4.4 percent pace calculated by the regional Fed’s forecast program on Sept. 5.
After last Friday’s jobs data, the nowcasts of third-quarter real consumer spending growth and third-quarter real gross private domestic investment growth decreased from 3.3 percent and 15.9 percent, respectively, to 3.0 percent and 14.0 percent, respectively.
The next GDPNow update is Friday, September 14.
For its part, Goldman Sachs reportedly claims President Donald Trump’s economy is growing at a pace of 3.5 percent, or double its estimated potential.
Goldman chief economist Jan Hatzius said the trade war poses little danger to the thriving economy, CNBC reported.
Hatzius predicts the Federal Reserve will hike interest rates six more times through the end of 2009.
Hatzius admitted various obstacles change the Fed's plans, but said that he is "comfortable" with the current forecast, which he said might even be conservative, CNBC reported.
"Although it is certainly possible that trade policy and emerging market spillbacks will result in a shallower path, on net we think the risks are tilted to the upside of our baseline forecast given the impressive growth momentum, the upward trends in wage and price inflation, and the very limited impact of the hikes on financial conditions so far," he wrote.
However, Citigroup economists warn that slowing growth in 2019 and 2020 pose a substantial danger to markets.
"We would characterize global growth as riding on the back of fading tailwinds, while facing increasingly strong headwinds. This raises the risk of an inflexion point some time in 2019 or early 2020," Citigroup economist Mark Schofield said in a note. "We fear that the investment backdrop is becoming more likely to support extended down-trades."
The U.S. economy expanded in the second quarter at a slightly faster pace than previously estimated on revisions to imports and software spending, bolstering the strongest period of growth since 2014, according to Commerce Department data releasted last month.
Meanwhile, Trump has taken to Twitter to tout his economic accomplishments.
“Trump has set Economic Growth on fire. During his time in office, the economy has achieved feats most experts thought impossible. GDP is growing at a 3 percent-plus rate. The unemployment rate is near a 50 year low.” CNBC...Also, the Stock Market is up almost 50% since Election!” he tweeted Sunday.
Trump followed that tweet up on Monday with another message.
"The Economy is soooo good, perhaps the best in our country’s history (remember, it’s the economy stupid!), that the Democrats are flailing & lying like CRAZY! Phony books, articles and T.V. “hits” like no other pol has had to endure-and they are losing big. Very dishonest people!" the president tweeted.
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