The United States GDP is set to expand by 0.6% q/q, rendering a 2.4% q/q annualised growth in Q4 2022, according to estimates by Now-Casting Economics. Both numbers mark a slowdown from Q3 2022, by 0.2pp and 0.8pp, but are still more optimistic for the US economy than other projections. Such a Q4 dynamic would translate into a 2.1% growth rate in the full year 2022, which is also higher than the figures from other forecasting peers.

The IMF forecasts a contraction of 4.9% q/q annualised in Q4 2022 and a 1.6% growth in the full year of 2022, and the consensus forecast by FocusEconomics also suggests a contraction for Q4 2022, albeit by a narrower value of 1.8% q/q annualised, and comparatively more optimistic growth of 1.8% in 2022. The World Bank’s estimates outweigh the previous two, at 1.9% y/y growth for 2022. However, the Q4 2022 GDP is expected to decline by 0.2% q/q annualised terms.

The GDP nowcast for Q4 2022 has gained largely on account of employment indicators such as non-farm private payroll employment, and unemployment rate, even though initial claims of unemployment insurance played the strongest detractor. Other growth drivers include industrial production and exports from the Euro Area, one of the US major trading partners. Besides unemployment insurance claims, sales of durable goods were a major inhibitor of the GDP nowcast, followed by domestic sales of automobiles, imports by the Euro Area, retail sales in the Euro Area, and US exports. The negative effect of domestic sales of automobiles showcases a restraint in demand, which seems to be motivated by the sharp hike in policy rates over 2022.

GDP Nowcast: Tracking GDP in Real Time