US Q4 GDP to dominate the calendar today – RBC CM

The first estimate of US Q4 GDP dominates the calendar today and economists at RBC Capital Markets expect a 2.5% advance (q/q saar; consensus 2.2%), on the heels of a robust 3.5% outcome in Q3.

Key Quotes

“Consumer spending should register just shy of 3% growth and contribute nearly 2ppts to the headline advance. The biggest drag should come from net exports, which will likely subtract nearly -0.5ppt from the top line. Note this component added a robust 0.9ppt in Q3. This outcome in Q4 would leave 2016 full-year growth at a relatively lackluster 1.6%. RBC forecasts that growth will accelerate to 2.5% in 2017. This is above the consensus (2.3%), although the consensus has been rising in recent months.”

“Aside from GDP, we have December durable goods orders (expected to rebound) and January UoM confidence (expected to remain at the 13-year high hit in December). Outside the US, Eurozone M3 is the only notable indicator. UK PM May meets President Trump in Washington. There will be a joint press conference, but as yet we have no guidance on timing.”