US: Q1 GDP could be the weakest of the year  - Wells Fargo

According to analysts from Wells Fargo, economic growth in the first quarter could be the lowest of the year, affected by weather.

Key Quotes: 

“This year’s late winter East Coast blizzard serves as a reminder of how weather and other factors have had an uncanny ability to make the first quarter the weakest quarter in four of the seven full years of economic recovery we have had so far. This
year’s first quarter also looks like it could be the weakest of the year, with our current estimate showing real GDP growing at just a 1.1 percent annual rate during Q1. While the weather played a role in suppressing growth this year, it was not so
much from the late winter blizzard as it was from the milder weather earlier, which cut utility use. The widening trade deficit also looks to have subtracted 0.5 percentage points off growth in the quarter and government spending declined.”

“While 2017 has gotten off to a slow start, we are still looking real GDP to rise 2.1 percent this year, following a 1.6 percent gain in 2016. Consumer spending is being supported by strong job and income growth. Consumer confidence has also held on
to much of the gains  posted following the presidential election. 

“Even with just 2.1 percent real GDP growth, we expect the unemployment rate to inch lower and look for inflation to continue to firm. Economic growth should remain strong enough for the Federal Reserve to hike the federal funds rate two more times, with the next hike likely coming in June.”