US: Expect 2.6% q-o-q saar print for Q4 real GDP growth - Nomura

Analysts at Nomura forecast a 2.6% q-o-q saar print for the US advance estimate of Q4 real GDP growth (Consensus: 3.0%), a slight deceleration from the previous two quarters of above-3% growth but a strong reading nonetheless.

Key Quotes

“PCE likely increased notably during the quarter, reflecting robust retail sales data and solid increases in personal spending on services. Higher stock prices and continued job growth supported strong consumer activities. For businesses, equipment investment continued its recent surge of double-digit annualized growth, likely contributing 0.7pp to topline growth, as new domestic shipments of core capital goods increased healthily during the quarter.”

“Other business fixed investment such as structures and IPP likely grew more modestly in the quarter, while we think residential investment, partly boosted by hurricane recovery efforts, grew strongly by about 12% q-o-q saar after two consecutive quarters of contraction. Finally, government spending likely increased during the quarter, buoyed by steady increases in both federal and state and local expenditures.”

“On the downside, inventory accumulation in Q4 may not have kept pace with the robust build-up in Q3, adding some drag to topline growth. Additionally, a surge in imports well above the growth in exports reduced net exports, adding additional headwinds.”