GDP Growth Rate and Forecast

Economic Forecasts

Consumers Are Propping Up the Economy, Driving GDP Growth

Kiplinger’s latest forecast for the GDP growth rate

iStockphoto

GDP 2019 growth will be 2.3%; 1.8% in 2020 More »
Jobs Job gains of about 170,000 per month in '19 More »
Interest rates 10-year T-notes staying around 2% until trade war ends More »
Inflation 2.3% in ’19, up from 1.9% in ’18 More »
Business spending Up 5% in ’19 as global growth slows More »
Energy Crude trading from $50 to $55 per barrel in October More »
Housing 5.35 million existing-home sales, down 1.1% in ’19 More »
Retail sales Growing 4.5% in '19 (excluding gas and autos) More »
Trade deficit Widening 7%-8% in ’19 More »

Consumer spending surged in the second quarter to lift GDP growth to 2.1% after 3.1% growth in the first quarter. Government also contributed strongly to growth. However, business investment in equipment, inventories and structures was weak, along with housing and exports.

Consumers are carrying a heavy load. If the weakness in business spending and exports starts to affect employment, then consumers may start pulling back.

Growth in the second half of the year is likely to be around 2.0%, leaving growth for the year at about 2.3%. GDP growth will soften a bit again in 2020, an election year, dropping to about 1.8%. It is expected that the tax-cut stimulus will wane, and the trade deficit will again be a worry. Uncertainties about global growth may limit businesses’ willingness to expand, especially as the U.S.-China trade war appears to be heating up again.

Source: Department of Commerce: GDP Data