Part of the increase in the US Q3 GDP has been inventories build up, possibly in advance to meet consumers holiday season spending in Q4. But consumer confidence has dropped and many would likely wait for the outcome in the election before sending. Also with healthcare cost and insurance premiums surging (due to Obamacare), consumers have less dollars to spend vs the same time last year. Not forgetting that the majority of jobs growth in the US have been minimum wage and part time jobs. So I believe the retailers will be disappointed with the retail sales in Q4.
Basically, I think the Q3 GDP could possibly be revised lower as other economic data just do not support that kind GDP number. For example big ticket items like construction spending, car sales, and others like freight volumes, companies earnings, have all fallen prior to the announcement of the GDP. I think very likely the Q4 GDP will be a poor read out.
The above is just my opinion.
No comments:
Post a Comment