Sunday, January 22, 2012

Q4 GDP Forecasts: Sluggish Growth

by Calculated Risk on 1/22/2012 10:53:00 AM

The advance Q4 GDP report will be released on Friday. The consensus is that real GDP increased 3.0% annualized in Q4. Here are a few forecasts:

From Merrill Lynch:

We expect real GDP advanced 2.7% annualized in the fourth quarter after rising 1.8% in Q3. Nearly a full percentage of the growth last quarter stemmed from inventory accumulation, which means that domestic final sales rose just 1.7%. ... Stepping back, the broader story is that as the shocks of last summer have dissipated, the economy has picked up momentum. However, the bounce we’ve seen is fairly feeble ...
From Goldman Sachs:
We estimate that real GDP increased by 3.2% (annualized) in Q4, up from 1.8% in Q3. Despite this momentum in the recent data, we still expect growth to slow somewhat in the first half of 2012. ... we expect the Euro-area crisis to weigh somewhat more heavily on growth than it has done so far, mainly via financial channels.
And a few more forecasts from a week ago via the WSJ MarketBeat:
Macroeconomic Advisers cut their estimate of fourth-quarter GDP from 3.3% to 3% today on the trade news. ... J.P. Morgan economists also cut their fourth-quarter estimates ... to 3% from 3.5%.

Bank of America Merrill Lynch economist Neil Dutta cut his estimate ... "A wider trade gap implies weaker GDP; our Q4 tracking estimate is running 2.7% from 3.0% post retail sales. The broader story is that growth net of inventory accumulation – domestic demand – is softening as we head into 2012."
Still sluggish growth.