The economy of the USA UU Show signs that it's downhill from here
The economy of the USA UU Show signs that it's downhill from here
The Commerce Department reported on Friday that the gross domestic product of EE. UU Expanded at an annual rate of 3.5%. In the third quarter.
With a growth rate of 4.2% in the second quarter, it marked one of the best six-month periods for the US economy in the last decade.
However, private analysts and the Federal Reserve say a slowdown is looming. Economists surveyed The Wall Street Journal estimates that the growth rate will be reduced to 2.5% in the first quarter of next year and to 2.3% in the third quarter of 2019. The Fed expects growth to slow further at a rate of 1.8% by 2021 .
"We believe that the growth of the US may have peaked," said Michael Gapen, chief economist at Barclays Capital, who is in the field of the great Wall Street slowdown.
Few believe that a recession is near, and the expansion is It is expected to become the longest in the registry next year. Even so, a slowdown in growth would have great implications for the shares, the central bank and President Trump. The White House says that faster growth is evidence that the tax cuts and their deregulatory position are working, and that the acceleration of the growth they produced is sustainable.
Mr. Gapen said that the two big drivers of growth this year, consumers and government spending, will slow down in the coming months. Consumer spending has recovered, thanks to tax cuts. He says that the spending momentum of the income tax cuts tends to be higher in the first two quarters after its enactment, and then fades in approximately eight quarters. Therefore, the growth of consumer spending, which reached a solid annual rate of 4% in the third quarter, should slow down in the coming months, although he said that strong family savings and low unemployment will prevent a sharp fall.
In February, the White House and Congress agreed to increase the federal government's spending by $ 300 billion over previous spending limits. That will boost government spending for several more months, boosting growth, but the budget agreement ends next September. That means that its impact will also fade, unless the next Congress accepts more.
Mr. Gapen pointed out that the great joke for growth is business investment. The tax cuts to companies are aimed at increasing investment in software, plants and equipment, which increases the growth rate of the economy now and its potential to grow in the future.
The White House projection of sustained growth of 3%. It depends on a boom in business investment. It seemed that was happening at the beginning of the year. Business investment grew at a rate of 11.5% in the first quarter, with gains in many categories, including machines, intellectual property and large structures. But it has faded since then, registering only 0.8% growth in the third quarter. That includes a drop in investment in structures such as oil and gas platforms, which have been a great growth engine.
"That's a concern, especially after (the companies) got a good check from Uncle Sam," said Beth Ann Bovino, an economist at S & P Global Ratings.
For the White House to forecast, business investment would have to rebound. A lower corporate tax rate, up to 21% from 35%, could help. But uncertainty about US trade disputes with China and others could be making business executives suspicious of proceeding aggressively with new projects.
"The economy is still strong, apart from part of this noise introduced by commercial rates and other things," said Douglas Wagoner, executive director of the cargo broker Echo Global Logistics Inc., during a call for earnings on Wednesday. "We do not really have a reading if this is just a temporary problem or a beginning of a trend."
The image of the investment is also very important for the Federal Reserve. If companies invest money in new software and machines, they increase the chances of increasing the productivity of workers, which will allow the economy to grow faster without causing inflation. Higher productivity would remove pressure from the central bank to continue raising interest rates. Without a follow-up of business investment, the EE. UU They could face a different result: less growth and more inflation, forcing the Fed to continue increasing rates.
The sectors sensitive to interest rates already show signs of fluctuation. Housing construction has contracted in five of the last six quarters. In addition, a stronger dollar, which increases the cost of exports to foreign buyers, could affect US trade.
Why has the stock market stumbled lately? Gapen said investors seem to be smelling the slowdown that economists have been calling for several months. While earnings growth was solid in the third quarter, and many analysts still expect double-digit earnings growth until next year, some executives are cautious.
Garbage collection and recycling company.
Waste management
Inc.
He said on Thursday that net income increased 29% from the previous year in the third quarter, but Devina Rankin, chief financial officer, said that "the economy is probably at an all time high."
"There's definitely a place to go from here," he said. "But we talked about the duration of growth in this economy and the expectation that it could change from here."
Write to Jon Hilsenrath in jon.hilsenrath@wsj.com and Harriet Torry in harriet.torry@wsj.com
.
!function(f,b,e,v,n,t,s)
{if(f.fbq)return;n=f.fbq=function(){n.callMethod?
n.callMethod.apply(n,arguments):n.queue.push(arguments)};
if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version='2.0';
n.queue=[];t=b.createElement(e);t.async=!0;
t.src=v;s=b.getElementsByTagName(e)[0];
s.parentNode.insertBefore(t,s)}(window, document,'script',
'https://connect.facebook.net/en_US/fbevents.js');
fbq('init', '369524843414444');
fbq('track', 'PageView');
.
SOURCE LINK ERESVIRAL.COM https://www.beviral.online
Comentarios
Publicar un comentario