First quarter GDP report on Friday likely is expected to have increase at a healthy 2.5% speed, indicating no sign of recession in future. The GDP report is expected to release at 8:30 a.m. ET Friday.
According to Stephen Stanley, Pierpont Amherst chief economist, from the start first quarter was doomed, because during the quarter there was a 5-week government shutdown end in January; the bad weather and freezing cold of January and February decelerated all sorts of activity and the stock market had a huge sell off into the end of December last year.
Stanley also added individuals were talking about a recession two months ago mainly due to the restraint from financial market shrinking. The recession discussions were pretty evident from the government shutdown, which pretty significant blow the confidence particularly when no one knows how long it will continue.
Moody’s Analytics GDP Survey illustrate economists have a median forecast of 2.4% growth, while Dow Jones consensus prediction is for 2.5% growth. The lack of data early in the quarter, resulting from shutdown, also led to concerns of traders. They are paying closer than usual attention to the data, as the recession fears and what implication it might have for growth leading towards Q2.
Stanley said n early half the quarter had the danger of the March 1 tariff hike that has worried everyone. But it should not be any shock as the quarter on track with really weak note. The fears were annoyed by the fact that we were kind of in a vacuum and a present we didn’t have data.
Bannockburn Global Forex chief market strategist Marc Chandler said it is previously assumed that the Q1 is stronger than individuals expected. It might get some headline affect, but it is forehanded to say anything as the data is still to be revealed.
Moreover, Stanley expects a growth of approximately 3.3% for Q2. He assumes to see retaliation by the consumer, after slow spending growth in Q1. Given the flat retail sales in March, the stage was set for a pleasant bounce back in Q2.