US growth momentum solid – Deutsche Bank

Analysts at Deutsche Bank suggest that the US growth momentum is solid, led by consumer rebound, stronger capex with fiscal policy being key uncertainty.

Key Quotes

“US economy poised to bounce back from another weak Q1

− Consumer spending has rebounded after soft Q1

− Survey data signal strong pickup in capital spending

− Sentiment remains buoyant, though some signs of peaking”

“Still expect 2.4% growth for 2017” 

“Labour market at full employment and likely to improve further

− Job growth slowing but still well above levels needed to bring down unemployment

− Return of participation downtrend, soft productivity growth will lower unemployment”

“Beyond 2017, growth should slow back toward potential 

− Key uncertainty is Trump’s tax reform, i.e., fiscal policy 

− We expect limited stimulus”