US economists surveyed by the Wall Street Journal forecast US annualized growth of 3.0% in Q3 and Q4.
Forecasts were similarly upbeat in the first half of the year but the economy proved to be disappointing. Growth averaged about 1.0% in the first six months of the year but could be revised slightly higher after yesterday’s trade data.
If GDP continues as expected, full year growth will be around 2%, which is far short of forecasts at the start of the year but better than was expected two months ago. Economists and the Fed have consistently overestimated growth over the past 4 years.
The bedrock of forecasts for better expansion is business investment but the latest round of corporate reports shows a continued move toward buybacks rather than domestic investment:
The five most optimistic economists think growth is speeding up to 3.5% or better in the second half, and they are counting on the business sector to step up its pace of capital spending.
