GDP Growth Rate and Forecast

Economic Forecasts

First-Quarter GDP Boosted by Special Effects

Kiplinger’s latest forecast for the GDP growth rate

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GDP 2.6% growth in '19 More »
Jobs Job gains near 180,000 per month in '19 More »
Interest rates 10-year T-notes at 2.8% by end ’19 More »
Inflation Up 2.2% in ’19 More »
Business spending Up 5% in ’19 as global growth slows More »
Energy Crude trading from $60 to $65 per barrel in August More »
Housing 5.35 million existing-home sales in ’19, up 0.2% More »
Retail sales Growing 3.7% in ’19 (excluding gas and autos) More »
Trade deficit Widening 7%-8% in ’19 More »

The first quarter’s strong 3.2% growth was boosted by one-time factors: Imports dropped following a fourth-quarter rush to bring in goods from China before tariffs took effect, which also made inventories jump in the first quarter. Those circumstances are unlikely to repeat in the second quarter.

Consumer spending grew only 1.2% in Q1, possibly held down by severe winter weather. Income growth also paused, though it should pick up later because of low unemployment and lots of folks working.

Consumer spending will be better in the second quarter, and the effects of a first-quarter government shutdown will be reversed. Housing should grow after contracting for five straight quarters. Second-quarter growth will likely be in the mid-2% range.

Overall economic growth will soften a bit. The expectation is for growth in the low 2% range, leaving growth for the year at about 2.6%. It will soften a bit again in 2020, an election year, dropping to about 1.8%. It is expected that the stimulus from the tax cuts will wane, and the trade deficit will again be a worry. Uncertainties about global growth may limit businesses’ willingness to expand, though this could change in a big way, depending on the outcome of U.S.-China trade negotiations.

Source: Department of Commerce: GDP Data