FXStreet (Łódź) - Rob Carnell from ING suggests that the Q2 US GDP reading due out on Wednesday should come in at 4.6%, which is a much more optimistic view than market consensus of a 3% rise.

Key quotes

“The consensus record for forecasting US GDP is not great. The consensus for the third release of GDP was -1.8% – more than a percent different than the actual figure.”

“Given that the first quarter was hit hard by a number of features that were reversible one-offs – bad weather and impact of Obamacare on health spending – there should be some strong bounce-backs.”

“One of the biggest drags in 1Q14 was from inventories (-1.6ppt). This is one of the hardest components of GDP to accurately forecast. But one of the ones we rely on, which uses ISM inventory data, suggests that we should anticipate a strong rebuild of the inventories that were drawn down in 1Q14.”

“Spending by the government looks to be bouncing back strongly too, thanks to some pent-up spending on structures (roads, bridges, etc) following the 1Q14 hiatus.”

“Nonetheless, despite recovering from 1Q14, consumer spending will struggle to do muchbetter than about 1.5% in 2Q14.”

“Business investment remains a fairly weak component. It is not all that clear why, given the continuation of the recovery, and neutral credit environment. We had hoped it would have already picked up by now, but it hasn’t really.“

“Residential investment has been fairly dismal. But then it was in 1Q14 too. It probably won’t be as bad as in 2Q14, but don’t expect much boost from this sector.”

“Net exports – although the winter weather in 1Q14 most likely hit exports hard, the rebuild of inventories is likely to suck in imports – net exports, although positively contributing to GDP, probably won’t do so by much.”

Related Articles
  1. Forex Fundamentals

    Chinese Yuan an Unlikely Reserve Currency

    As the world's second largest economy, China's challenge to America’s dominance includes a push to make the yuan (RMB), the world’s reserve currency. Whether it can do that now is unclear.
  2. Economics

    How Currency Enforcement Helped Sink The Trans-Pacific Partnership (TTP)

    One particular barrier to trade that has received much attention of late and caused delays in negotiations of the TPP is exchange-rate manipulation, by which a country artificially devalues its ...
  3. Forex

    Top U.S Forex News Sites

    Breaking news moves forex markets. Here are the top U.S. sites for tracking forex news.
  4. Investing

    Financial News Comparison: Bloomberg Vs. Reuters

    Access to financial information has grown with the expansion of digital news. Bloomberg and Thomson Reuters lead the pack, claiming a majority of the business information market.
  5. Economics

    Who Benefits From South Korea's Lowered Interest Rates?

    South Korea is the latest country to cut interest rates in an attempt to stimulate economic growth.
  6. Forex Education

    The Top Uses For P2P Currency Exchange

    Peer-to-peer (P2P) currency exchange networks offer a viable and cheaper alternative for buying and selling currencies.
  7. Forex

    Steps To Open An Offshore Forex Account

    Here is a simple breakdown of how to open an offshore forex account for US-based users, including legal requirements.
  8. Entrepreneurship

    Top Forex Trading Apps

    A brief overview of the top apps that help forex traders with on time information, charts and more.
  9. Investing Basics

    The Risks Of Buying Bitcoin

    Virtual currency is probably here to stay, but what about Bitcoin specifically? Does it have a first-to-market advantage? What are the risks involved?
  10. Forex News

    How The Forex "Fix" May Be Rigged

    When it comes to forex, some types of "fixes" are legal. But some really aren't.
RELATED TERMS
  1. No results found.

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!