GDP forecasts cut on sharply wider trade deficit
WASHINGTON (MarketWatch) — Economists cut their forecasts for economic growth in the fourth quarter after government data showed Friday morning that the U.S. trade deficit sharply widened in November. The consensus estimate among economists polled by MarketWatch now forecasts fourth-quarter annualized growth for gross domestic product of 1.2%, compared with a prior consensus view of 1.3%. Looking at individual forecasts, Stephen Stanley at Pierpont Securities cut his forecast to 0.5% from a prior view of 1.5%. “We are starting to get to dangerously low figures,” Stanley wrote in a research note. Elsewhere, J.P.Morgan analysts cut their estimate for fourth-quarter growth to an annualized 0.8% from a prior forecast of 1.5%, while Barclays analysts cut their estimate for fourth-quarter GDP growth to 1.3% from 2.0%, and analysts with Morgan Stanley cut their forecast to 0.7% from 1.5%. Net exports are an important component of U.S. economic growth. Deficits subtract from gross domestic product.
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