US: GDP above expectations, but a slowdown is ahead – Nordea

Nordea Markets analysts note that the US GDP for Q3 came in at 1.9 % q/q annualized, slightly lower than in Q2.

Key Quotes

“Going forward, we expect growth to slow further, though a trigger is probably needed for a recession to materialise. Today’s numbers should not impact tonight’s FOMC decision.”

“US third quarter GDP came in slightly above expectations at 1.9% q/q annualized (Nordea: 1.5%, consensus: 1.5%, previous: 2.0%). This indicates that the US economy is currently growing close to potential (≈1.8%), although the output gap remains positive.”

“Consumer spending remained strong, while investments stayed weak. Hence, non-residential investments was the main negative contributor, while residential investments (housing) on the other hand reduced some of the negative impulses in Q3. The latter is the main reason for the positive surprise.”

“Adding to the overall slightly positive surprise is that Q3 was most likely temporarily negatively impacted by the grounding of the Boeing 737 Max jet and to a lesser extent the General Motors strike (started 16 September). Hence, those negative impulses should to some extent turn positive in Q4.”