The Bureau of Economic Analysis (BEA) will release its widely anticipated fourth-quarter gross domestic product (GDP) estimate on Thursday, delayed by almost one month as a result of the 35-day partial government shutdown.
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While it’s not an official forecast, GDPNow, a real-time tracker monitored by the Federal Reserve Bank of Atlanta, is estimating fourth-quarter growth of 1.8 percent, as of Tuesday. That estimate is a sharp decline from Dec. 21, when it was estimated to be close to 2.8 percent, largely because of a grim outlook for retail sales.
In the middle of February, U.S. retail sales record their biggest drop in more than nine years, spurring fears about an economic slowdown and a drop in consumer spending at the end of 2018. According to the Commerce Department, retail sales fell by 1.2 percent, the largest decline since September 2009, when the U.S. was still recovering from the Great Recession.
If the economy grows by less than 2.2 percent, it will be the lowest reading in about two years, according to Dan North, the chief economist at Euler Hermes North America.
“One main question is, who was right about December retail sales?” he said. “The government reports showed a disaster, but Amazon and Walmart saw a party.”
In the July-September period, the U.S. economy grew by 3.4 percent.
The BEA generally provides three estimates of the GDP for each quarter; however, they will only provide two readings this quarter. The final reading remains on track for March 28.