JP Morgan slashes down its GDP forecast to only 1 percent

Economists from JP Morgan predict only a 1% economic growth in Q2 of this year in the United States prior to their 2.25% forecast. 3.2% was much earlier predicted in the first quarter of the year but the economic scene could not favor this. Capital shipments and goods orders were awful, which greatly attributed to the low economic growth in the first quarter.

This report was issued recently by economists in the April durable goods report. According to the Atlanta Fed’s GDP Now, a 1.3% growth in the first quarter of the year is expected. This however led to JP Morgan economist changing their view on the Fed and hence have little anticipation on the interest rate rise.

JP Morgan economists had expectations that the next course of action by the Fed would be a plus to them by the year 2020. This can however not be ruled off but by having in mind the steady inflation, a prediction may not come through.

A report from the collected data by The durable goods report shows that PPI manufacturing and the data services were tremendously weak. The report aided in the increase of a fuel stock market sell-off and Treasury buying which made the 2017 record a low outcome. Treasury yield was at 2.32% and after several days, it drifted to 2.29%.

MUFG Union Bank chief financial economist, Chris Rupkey said that confidence in business is lacking most in the manufacturing sector. He also reiterated that some corporate financial heads believe that according to the many surveys done, chances for an increase in a recession are so high that they end up canceling some orders and order less in urgent situations.

Low economic growth, trade wars, and impacting business reactions are some of the reasons JP Morgan economists’ said that hinder the growth in the United States.

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