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The US economy could not grow at all this quarter



Two closely watched GDP models released by regional Federal Reserve banks on Friday paint a completely different picture from the record highs on the stock market, let alone the recent comments by President Donald Trump.

The New York Fed's fourth-quarter GDP now calls for growth of just 0.4%. This is below the model's earlier forecast for growth of 0.7%. The New York Fed cited "negative surprises" in recent economic reports, including a decline in industrial production in October.
The Atlanta Fed GDPNow model is even bearier. The growth trajectory was dimmed to just 0.3% for the fourth quarter on Friday, compared with 1% a week ago. The US Federal Reserve Bank of Atlanta partially accounted for the soft consumer spending released on Friday, with retail sales (excluding vehicles and gasoline) up just 0.1
% in October.
These GDP models are based on in-depth economic data and are regularly updated as new numbers are released. In other words, it is possible that these projections will look overly gloomy by the end of the year. The economy could pick up in November and December by ending the GM [194559005] ( GM ) capital streak.

Wall Street companies are generally cautiously optimistic about the fourth quarter. For example, Goldman Sachs reduced its GDP estimate for the fourth quarter on Friday to 1.9%.

Nevertheless, these Fed GDP models suggest that the US economy is unlikely to grow this quarter. When growth comes to a standstill, the economy becomes more vulnerable to a negative shock that could drive them into recession.

Trump says the economy is "BOOMING"

Compare all this to Trump's recent comment.

"Economy is booming," Trump tweeted on Tuesday. "Seems to have another record day!"

Jerome Powell, the chairman of the Federal Reserve, had a different attitude.

"Look at today's economy, there's nothing that's really booming, what would burst," Powell told lawmakers on Thursday.

  Fed chairman says US growth is threatened by trade wars and global inertia.

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