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Economic Forecasts

A Weak First Quarter in 2019 for U.S. GDP; Second-Quarter Rebound Ahead

Kiplinger’s latest forecast for the GDP growth rate

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GDP 2018 growth is 2.9%; 2.5% for 2019 More »
Jobs Job gains will be around 180,000 per month in 2019 More »
Interest rates 10-year T-notes at 2.8% by end ’19 More »
Inflation 2.2% in ’19, up from 1.9% in ’18 More »
Business spending Up 5% in ’19 as global growth slows More »
Energy Crude trading from $55 to $60 per barrel in June More »
Housing 5.35 million existing-home sales in ’19, up 0.2% More »
Retail sales Growing 4% in ’19 (excluding gas and autos) More »
Trade deficit Widening 7%-8% in ’19 More »

The federal government shutdown in January will drag down reported first-quarter 2019 GDP growth, but the slowdown will be temporary. Second-quarter growth should rebound strongly, and growth should average at least 2.5% for the entire year.

Growth was a decent 2.6% in the fourth quarter of 2018, following strong growth in the second and third quarters. Consumer spending grew 2.8% in the fourth quarter and will likely grow about the same in 2019. Income growth should still be strong because of low unemployment and lots of folks working. Government spending and housing construction will contribute modestly to growth, and businesses are adding to inventories. However, business investment is slowing markedly because of the uncertain outlook.

Trade is likely to detract from growth, as slowing growth in overseas economies hurts exports. The added uncertainty of the U.S.-China trade war could create knock-on effects that slow business investment plans, and the need to rejig supply chains will reduce productivity and increase costs.

Source: Department of Commerce: GDP Data