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Atlanta Fed Cuts 4Q GDP Growth Prediction to 2.5 Percent

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(Valiantsin Korznikau/Dreamstime)

By    |   Friday, 01 February 2019 04:29 PM

The U.S. economy is expanding at a 2.5 percent annualized rate in the fourth quarter, based on data on construction spending, the Atlanta Federal Reserve’s GDPNow forecast model showed Friday.

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2018 is 2.5 percent on February 1, down from 2.7 percent on January 31.

The nowcast of fourth-quarter real nonresidential structures investment growth decreased from -1.2 percent to -5.4 percent after Friday morning's construction spending report from the U.S. Census Bureau.

The next GDPNow update is Wednesday, February 6.

U.S. construction spending edged up in November as a gain in home building helped offset weakness in nonresidential construction. The Commerce Department said Friday that construction spending rose 0.8 percent in November after a 0.1 percent gain in October and a 1.8 percent fall in September.

The strength in November came from a 3.5 percent jump in spending on home building. That reflected a 2.6 percent increase in apartment construction which offset a 1.8 percent drop in single-family construction.

The construction data was released abaout 90 minutes after the government said U.S. job growth surged in January, with employers hiring the most workers in 11 months.

The jobs report pointed to underlying strength in the economy despite an uncertain outlook that has left the Federal Reserve wary about more interest rate hikes this year, Reuters said.

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Atlanta Fed Cuts 4Q GDP Growth Prediction to 2.5 Percent
atlanta, fed, gdp, now, economic, growth
Friday, 01 February 2019 04:29 PM
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