We're getting more and more signs that 2019's first GDP report could be an ugly one

trader

  • Market watchers lowered forecasts for first-quarter
    growth Monday.
  • That was after disappointing retail sales and jobs
    data. 
  • Still, some think recent economic data is little more
    than month-to-month noise.

As key measures of the economy come in softer than expected,
forecasts for US growth in the first quarter are falling across the
board.  

Citing weaker spending at stores, restaurants, and online,
the
Atlanta Federal Reserve
’s closely-watched GDPNow forecast
model for the first quarter was trimmed on Monday to an annualized
rate of 0.2%. Previously, it was at 0.5%.

Earlier Monday, the Commerce Department
reported
a slight recovery in retail sales at the beginning of
2019 but sharply lowered previous figures. After revisions,
December’s retail sales fell 1.6% to mark the biggest drop in a
decade. 

Most other forecasts for growth in the first quarter are more
optimistic — the New York
Federal Reserve’s
estimate was at 1.4% on Friday — but market
watchers are remaining cautious in wake of disappointing economic
data.

Barclays, for example,
lowered
its forecast from 2.5% to 2% on Monday.

“Further downward revisions to December’s data came as a
surprise to us, and point to a slower momentum in consumption
spending heading into Q1,” the analysts said in a research
note.

The most recent jobs report didn’t help to calm concerns. On
Friday, the Bureau of Labor Statistics said the US economy added
20,000 nonfarm payrolls in February, the fewest of any month since
September 2017 and far below expectations for an increase of
180,000 jobs.  

Still, some see recent economic results as little more than
month-to-month noise. Gross domestic product estimates can vary
widely and are subject to revisions.

Recent data could also point to seasonal flukes rather than a
downward trend, according to Eric Winograd, a senior economist at
AllianceBernstein. Like many others, he expects growth to rebound
over the medium term.

“I see no cause for alarm,” he said.

SEE ALSO: Retail
sales rose in January — but declines at the end of 2018 were even
sharper than originally thought


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Source: FS – All – Economy – News
We're getting more and more signs that 2019's first GDP report could be an ugly one