28
Mar
Consumption to boost US GDP in Q2
Growth will improve in Q2. Employment is the key variable. Rising wages will boost consumption. No Fed action. Upswing in inflation. Take profits on equities.
Key points
- Sustained pace of growth in the US
- GDP up +2.2% in Q4 2018
- Annual growth exceeds +3%
- Likely slowdown to +1.5% in Q1 2019
- Growth expected to accelerate to +2.6% in Q2
- No further rate hikes by the Fed in 2019
- Leading indicators persistently anaemic
- Employment figures are strong
- Pace of wage increases accelerates (+3.4%)
- Upswing in inflation and long-term rates
- Consumption further confirmed as the main driver of growth
- Moderately positive outlook for the dollar
- Take profits on equities after an exceptional Q1
