The U.S. economy is growing at a 2.9 percent annualized pace in the second quarter based on data on May retail sales and consumer prices, the Atlanta Federal Reserve's most recent GDP Now forecast model showed.
The latest second-quarter gross domestic product estimate was weaker than the previous reading of 3.2 percent calculated earlier last week, the Atlanta Fed said.
"The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2017 is 2.9 percent on June 16, down from 3.2 percent on June 14. The forecast for second-quarter real residential investment growth decreased from 1.8 percent to 0.4 percent after this morning's housing starts release from the U.S. Census Bureau. The forecast of the contribution of net exports to second-quarter growth declined from -0.23 percentage points to -0.34 percentage points after yesterday's Import/Export Price Index release from the U.S. Bureau of Labor Statistics."
The next GDPNow update is Monday, June 26.
For his part, President Donald Trump said Thursday that “some very good numbers” are coming soon on U.S. economic growth.
While the White House didn’t immediately respond to a request to clarify Trump’s comments, there are wide expectations among researchers that the rate of expansion in the April-to-June period will rebound from a first-quarter slowdown. The pace of gross domestic product gains was dragged down earlier this year by what many analysts saw as temporary factors such as warm weather that resulted in lower utility bills.
Economists surveyed by Bloomberg News earlier this month expect GDP to expand at a 2.4 percent annualized pace this quarter, based on the median estimate. That would be double the 1.2 percent rate in the January-to-March period and above the 2.1 percent average since the recession ended in 2009. The Federal Reserve Bank of Atlanta has a GDP tracker forecasting 3.2 percent for the quarter. The Trump administration is aiming for 3 percent sustained growth within a few years.
“I think some very good numbers are going to be announced by the way in the very near future, as to GDP,” Trump said at a White House event.
On Tuesday, he made similar comments: “When the numbers are announced, the GDP numbers, I think they’re going to be shockingly good, based on all of the facts that we’re hearing and based on the enthusiasm from the businesses, because they’re doing well. And we’ve just started.”
There are some caveats to the outlook: The quarter still has half a month remaining, and until the Commerce Department releases its report on July 28, a variety of fresh figures on employment, consumption, production and inflation will cause analysts to tweak their growth estimates. In addition, volatile components of GDP, such as trade and inventories, can cause swings in the data that don’t necessarily reflect the underlying health of the economy, Bloomberg explained.
(Newsmax wires services contributed to this report).
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