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US: Above-trend growth to continue in 2018 – Nomura

Analysts at Nomura note that the advance estimate of US Q2 real GDP growth came in at 4.1% q-o-q saar, mostly in line with their and market expectations (Nomura and Consensus: 4.2%), following an upwardly revised 2.2% reading in Q1 (previously reported as 2.0%).

Key Quotes

“The robust growth in Q2 is the fastest pace since near-5% growth in Q2 and Q3 2014. The magnitude of the comprehensive revisions, which incorporate new source data and methodological changes, was relatively minor.”

“Between Q1 2012 and Q1 2018, real GDP increased at an average annualized rate of 2.2%, unchanged from the BEA’s previous estimates.”

“Report is consistent with an economy growing well above trend, with an average annualized growth rate of 3.1% in H1 2018. With nonfarm payroll growth averaging a robust 218k in Q1 and 211k in Q2, employment data appear consistent with this view.”

“The details of the GDP report were, on net, in line with our expectations and we maintain our 3.2% forecast for Q3 real GDP growth.”

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