GDP Growth Rate and Forecast

Economic Forecasts

Moderate 2% Growth Continues

Kiplinger’s latest forecast for the GDP growth rate

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GDP 2019 growth will be 2.3%; 1.8% in 2020 More »
Jobs Job gains of about 150,000 per month in ’20 More »
Interest rates 10-year T-notes staying well below 2% until coronavirus fears ease More »
Inflation 2.1% by the end of ’20, from 2.3% at end '19 More »
Business spending Unchanged in '20- coronavirus makes global outlook uncertain More »
Energy Crude trading from $50 to $55 per barrel until coronavirus fears ebb More »
Housing Total starts up 3.2% in '20 More »
Retail sales Retail and food service sales, excluding autos and gas, should rise 3.5% in 2020 More »
Trade deficit Widening 6% in ’20 More »

U.S. GDP grew by 2.1% in the fourth quarter, the third consecutive quarter of roughly 2% growth. While the growth rate stayed the same, some components shifted. Consumer spending slowed substantially, growing by 1.8%, down from 3.2% in the third quarter. Business spending on equipment contracted for the second consecutive quarter. Construction of buildings dropped heavily for the third quarter in a row. And very little was added to inventories, the lowest amount in six quarters.

What saved growth in the fourth quarter was a huge drop in imports, one of the reasons for the flatness of inventories. Housing was a bright spot, and government spending also contributed.

In 2020, we expect growth of 1.9%. Imports should rebound, but we also expect consumer spending growth to stabilize. Glimmers of a turnaround in the global economy may boost business spending. Low mortgage rates should make this year a good one for housing.

The main uncertainty is the effect that the China coronavirus will have on China’s economic activity and on the global economy as a whole. It is likely that China’s production of some goods and materials will be disrupted for a while, and this could affect certain industries in the U.S. For example, 80% of the ingredients used by U.S. generic drug makers are imported from China.

Source: Department of Commerce: GDP Data