US: We expect real GDP to accelerate to 3.1% during the third quarter - Wells Fargo

Analysts from Wells Fargo, look for real GDP growth to accelerate to a 3.1% annual rate during the third quarter, supported by consumer spending.

Key Quotes:

“After a disappointing first half in which real GDP growth averaged just a 1.0 percent pace, economic activity appears to have finally gained momentum. We are now looking for real GDP growth to accelerate to a 3.1 percent annual rate during the third quarter, with consumer spending accounting for most of the improvement.”

“Stronger third quarter growth likely does not mark the beginning of sustained, meaningful improvement in economic activity. While the drag on capital spending from reduced oil and gas drilling appears to be ending, some other sectors where growth had been solid are now cooling off, most notably the automotive and aerospace sectors. International trade also remains a source of concern, with expectations for global growth continuing to be downgraded.”

“Real GDP growth of 3 percent or better in the third quarter would back up Fed Chair Janet Yellen’s statement that the case for raising the federal funds rate has strengthened. We expect the Fed to increase the federal funds rate one quarter percentage point at its December 13-14 FOMC meeting.”