The widening U.S. trade gap has many observers – and not just bears – busily trimming their second quarter growth estimates for the U.S. economy. The preliminary estimate came in at 2.4 per cent, down substantially from the first quarter and slightly below expectations.
David Rosenberg at Gluskin Sheff, has come up with his revision: He believes the second quarter growth will be revised down to 1.5 per cent at an annual rate. The third quarter looks even worse.
“Moreover, there is such a weak ‘handoff’ in the consumer sector going into the third quarter, along with a collapse in housing and a slight moderation in capital spending and little or no contribution from inventories, that I think we could very well see a flattish GDP performance for the third quarter; my guess right now is 0.5 per cent at an annual rate,” he said in a note.
