US Q4 GDP: Balance of risks looks to be to the upside - Wells Fargo

Next Friday, the first estimate of Q4 GDP will be released. Analysts from Wells Fargo, expect growth to be 2.9%. They see upside risks. 

Key Quotes: 

“This coming Friday we will see the first look at Q4 GDP as well as data for 2017 as a whole. On an annualized basis, we expect growth to be 2.9 percent – continuing the recent string of strong quarterly readings. For 2017, we expect 2.3 percent year-over-year growth, a marked improvement from the 1.5 percent growth rate notched in 2016.”

“We project personal consumption and business fixed investment to improve on the quarter based on encouraging monthly data, which continue to point to high levels of confidence in each sector. Residential construction should also provide a boost to topline GDP following consecutive quarters of dragging the headline figure lower. Net exports are likely to exert a drag on GDP growth in Q4 after adding positively to the headline throughout 2017. Incorporating the newly passed tax reform package, the U.S. economy appears to be on the upswing as 2018 kicks off. The balance of risks looks to be to the upside.”