Primed for a rebound? US growth set to stabilise

Wall Street estimates for US GDP growth for the first quarter have turned more positive. (Bloomberg pic)

LONDON: The US economy is set to show fresh signs of stabilising and indeed even strengthening after its recent soft patch.

After a run of data last week exceeded forecasts, the government on Friday reveals its first estimate of gross domestic product for the first quarter.

Wall Street estimates are creeping higher with the consensus of economists surveyed by Bloomberg pointing to a 2.2% advance. A gauge published by the Federal Reserve Bank of Atlanta comes in at 2.8%.

Less confident are the economists at Bloomberg Economics, who project expansion of 1.5%.

“A substantial inventory – the byproduct of 2018 trade tensions – is contributing to weak readings on economic activity at the start of the year and may be the most overlooked near-term economic risk,” said Bloomberg Economics’ Yelena Shulyatyeva and Carl Riccadonna. “This is partly responsible for the overly bearish assessment of economic prospects. However, as this mini-inventory cycle runs its course, growth will be poised to significantly outperform in the second half.”