A deceptively strong 3.2% real GDP advance in Q1, along with solid labor market developments in April, confirmed that the US economy is not headed for a recession. However, it remains the case that with fiscal stimulus dissipating, economic momentum will cool through the remainder of the year. We believe the economy will grow 2.6% in 2019 supported by strong fundamentals, still-elevated confidence and a “patient” Fed, but slower disposable income growth, lackluster global activity and rising trade tensions vis-à-vis China represent important downside risks.
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