Photo: New York Public Library
Just looking ahead to next week’s GDP reading. Here’s some commentary on the expected upward revision, which is obviously going to put recent recession talk to bed (once again). I’m maintaining my long standing stance that there will be no recession in the USA in 2012 and it remains unlikely in the first few quarters of 2013:Via Nasdaq and TD Securities:
Market expectations of a pretty substantial upward revision in the US Q3 GDP, from a preliminary estimate of 2.0% Q/Q annualized to a second reading of 2.8%, will “put the US on considerably stronger footing heading into the peak fiscal cliff uncertainty”, wrote TD Securities analysts, as they observed equity markets rebounding this past week after the post-US losses. Reports about today’s Black Friday should also garner attention as investors look for “signs of how consumer spending is holding up post-election”, they added.
Next Thursday, the BEA will release the second estimate of Q3 GDP. The consensus is GDP will be revised up to 2.8% annualized growth, from the advance estimate of 2.0%. This would be a pretty sharp upward revision.
As an example, from Nomura analysts today:
“We believe real GDP growth will be revised significantly upward to an annualized pace of 3.0% versus the originally reported 2.0%, supported by greater inventory building and better net trade statistics than previously estimated.”
“The economy’s momentum has picked up a bit” as the fundamentals of the private sector “are improving,” said Jan Hatzius, chief economist at Goldman Sachs in New York. He projects third-quarter expansion will be revised up to 2.8 per cent, and the fourth quarter may come in at 1.7 per cent.
According to Dean Maki, chief U.S. economist for Barclays:
Maki projects about $200 billion of fiscal tightening; under these circumstances, “solid momentum” entering the final quarter of the year would give the U.S. enough of a cushion to sustain growth.
“It doesn’t make us invulnerable,” he said. “But it’s better than if the economy had already been slowing sharply and then we were hit with these types of events.” His growth forecasts include 2.9 per cent for the third quarter and 2.5 per cent for the fourth, followed by 1.5 per cent in the first three months of 2013 and a pickup to 2 per cent for April-June.
Business Insider Emails & Alerts
Site highlights each day to your inbox.