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Electricalmarketing 2760 Economic Indicators Gettyimages 912808702 1024
Electricalmarketing 2760 Economic Indicators Gettyimages 912808702 1024
Electricalmarketing 2760 Economic Indicators Gettyimages 912808702 1024
Electricalmarketing 2760 Economic Indicators Gettyimages 912808702 1024
Electricalmarketing 2760 Economic Indicators Gettyimages 912808702 1024

IHS Economists See Slightly Less Support for Growth Over Next Few Quarters

Dec. 7, 2018
IHS Markit Chief US Economist Joel Prakken and Executive Directors Patrick Newport and Ben Herzon see less near-term momentum in output and inflation.

Here's an interesting economic  snapshot that  IHS' Prakken, Newport and posted this week:

GDP growth was reported at 3.5% in the Bureau of Economic Analysis' second estimate for the third quarter, unrevised from the advance estimate. However, the composition of third-quarter GDP was less supportive of growth going forward, as final sales were revised lower and inventory investment was revised higher, according to Source: IHS Markit December US Economic Forecast Flash. Furthermore, data in the interforecast period led to a similar degradation in the growth profile of fourth-quarter GDP (less final sales, more inventory investment).

The reduced near-term momentum, along with an assumed slower ascent of housing starts to a 2022 peak, were mainly responsible for lowering our forecast of GDP growth for 2019 by 0.1 percentage point to 2.3% (fourth quarter over fourth quarter) and raising our forecasts of GDP growth for 2021 and 2022 by 0.1 percentage point each to 1.6%.

Unexpected weakness in core personal consumption expenditure (PCE) inflation in October, a removal of the previously assumed step-up to 25% of the tariff rate paid on $200 billion of imports from China, and a materially lower path for oil prices lowered our core PCE inflation forecast by 0.2 percentage point over 2018‒19. We still expect core PCE inflation to overshoot 2.0% by a couple tenths of a percentage point. Reduced GDP growth and somewhat lower inflation in the near term led us to assume a somewhat more gradual path for Federal Reserve interest-rate hikes beginning in the second half of next year.

Click on the green box below to see the table.