USMCA a potential boom for the US GDP?
Mattie Duppler, member of the National Taxpayers Union on the potential impact of the USMCA agreement on the markets and the economy of the United States.
The economy of the United States grew faster than most economists expected during the first quarter of 2019, according to data released Friday by the Department of Commerce.
During the three-month period from January to March, GDP increased at an annualized rate of 3.2 percent, surpassing the expectations of most analysts of 2.5 percent.
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It also beat GDPNow, a real-time tracker monitored by the Federal Reserve Bank of Atlanta, which reduced its forecast to 2.7 percent this week due to weak existing home sales and a drop in investment growth. residential.
The economy shook to a large extent the effects of a five-week government shutdown, the longest in US history, that White House officials once warned could result in near-zero growth. The confrontation was the result of a dispute between President Trump and Democratic leaders in Congress over funding a wall along the US border. UU And Mexico.
Disposable income increased $ 116 billion, or 3 percent, in the first quarter. The general prices of 0.8 percent.
Investors watched the publication of the report carefully for signs to dispel fears of an impending economic recession. Shares rose by better than expected results in pre-market operations.
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"We started in 2019 with the fear that the longest government shutdown in history, combined with a softer global growth outlook, would affect economic activity in the first quarter," said Michael Reynolds, an investment strategy officer at Glenmede "The 3.2 percent growth is a solid result, which suggests that this long and late expansion may be more resistant than feared.
But despite the better than expected figure, some analysts suggested that the US economy. UU It will continue to decelerate in 2019 and 2020. Although inventories were high, which boosted growth, said Agathe Demarais, global forecast director of the Economic Intelligence Unit. It is likely to become a drag on growth soon.
Demarais estimated that growth in 2019 will be 2.2 percent, a sharp drop of 2.9 percent in 2018. She attributed part of that to the effects of global trade tensions. In 2020, he said growth is expected to fall to 1.7 percent amid declining consumer demand and a less favorable external environment.
"In this context, we expect the Federal Reserve to maintain interest rates this year before cutting rates by 50 basis points in 2020," he said. "This path for monetary policy will cushion growth from 2019 to 2020 and will help protect against a more acute slowdown in US economic conditions."
