US GDP Preview: Forecasts from 10 major banks, surging economic activity

We expect GDP to have grown by 3.3% QoQ AR, driven by still upbeat private consumption and structures investment. While growth has remained stronger than we have anticipated for now, we still foresee weakening towards the winter not least amid tightening financial conditions, and think the Fed is done with hiking rates.

Activity numbers remain strong, with the highlight being third-quarter GDP. We look for it to come in at around 4%, boosted by strong consumer spending. Leisure and tourism spending has been particularly firm, while residential investment should also contribute positively together with government spending. 

We expect the advance reading to show real GDP grew by +5.2% in Q3, up from 2.1% in Q2.

Q3 GDP is tracking a 5% QoQ annualized increase on firm consumer spending, a larger net trade build and a jump in inventories.

We expect a 5.2% annualised number in what was a quarter that surprised almost everyone with its strength.

GDP could have expanded by 4.8% in annualized terms.

There’s even some upside risk to our 3.9% projection if inventories fail to provide the drag that we’ve built in. There’s not really much logic, then, to the talk of a Fed pause at the upcoming meeting, and as a result, that could be just another ‘skip’, with a further hike in store for December.

Real GDP growth should be close to 5% for 3Q23, which is clearly strong. 

We forecast real GDP to expand at a 5.0% annualized rate in Q3. If realized, economic growth will be up 3.0% on a YoY basis, roughly half a percentage point ahead of its pre-pandemic average. 

We expect a very strong 4.7% QoQ SAAR increase in real GDP by expenditure in Q3 with strength largely led by consumption. A strong increase across goods and services consumption would reflect some bounce-back from softer services spending in Q2, with a renewed pick-up in goods spending as demand remains strong overall. This would be in line with a few months of a substantial pick-up in retail sales data. Strong activity has also broadened away from consumption, with recent strength in industrial production and durable goods orders likely leading to a solid increase in most components of business equipment investment.