April 30, 2019

US Economic Update, April 2019

Q1 GDP – headline growth overstates strength, but still a good result.

  • US GDP growth accelerated in Q1 2019 to a strong 3.2% q/q (annualised).
  • However, this was due to a boost from net trade and inventories, while domestic final demand actually weakened.
  • We still expect growth to slow over 2019 but with Q1 GDP stronger, and financial conditions recovering more quickly, than expected we have revised up our 2019 GDP forecast to 2.5% (from 2.1%).
  • We still expect the Fed to remain on hold this year, as the stronger activity data is offset by a weakening in inflation.

For further details please see the US Economic Update: April 2019.