Economic outlook: Stuck in neutral as we cling to cash

Robert Johnson, CFA 6 July, 2015 | 5:00PM

Despite a lot of ups and downs over the last three months, our full-year economic forecast remains relatively unchanged since our last report. Our full-year GDP growth forecast for the United States remains steady at 2%-2.5%, as it has for the last three years. We see nothing that would cause the U.S. economy to break sharply out of that channel.

Also, we are not changing our full-year forecast despite a first quarter that was disappointing to many. Weather and poorly constructed seasonal adjustment factors produced a decline, just as they did in 2014. The first quarter of 2015 also suffered further from labour actions at West Coast ports that shifted the flow of imports and, to a lesser degree, exports.

Just as in 2014, we expect unusually large growth rates in the back half of the year to make up for the shortfall in the first quarter. This implies that growth will need to average over 3% for the last three quarters of the year. That said, we don't expect the bounce to be quite as large as in 2014. The first-quarter inventory drawdown was not nearly as dire in 2015, which means the subsequent bounce-back can't be nearly as large, either.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free
TAGS

About Author

Robert Johnson, CFA

Robert Johnson, CFA  Robert Johnson, CFA, is director of economic analysis for Morningstar.

© Copyright 2020 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Cookies