Blue Chip Macro Forecasts Hold Up Despite Weak First Quarter

While economists do expect the severe winter weather and the drought in the West to have taken a toll on economic growth in the first quarter of 2014, they remain quite upbeat about the remainder of the year and 2015, according to the latest consensus forecasts from Blue Chip Economic Indicators.

While the forecast for annualized real growth of gross domestic product in the first quarter fell to 1.7% in the early April survey from 1.9% in the March survey, the forecast for the full year remains at 2.7%. The 50 economic forecasting groups polled by Blue Chip expect quarterly growth to rebound to 3% in the second and third quarters and hit 3.1% in the final quarter of the year. The GDP forecast for 2015 has remained at 3% since the beginning of the year.

More important to foodservice, the forecasts for real disposable income and personal consumption expenditures have also held. Real DPI is forecast to grow 2.3% this year, following a paltry 0.7% gain last year, and improve to 2.9% in ’15. The current forecast for real PCE 2014 growth actually ticked up a smidgen in the April survey to 2.6% for ’14 and improved to 2.9% next year.

The Blue Chip-ers also are mostly holding to their long-range forecasts, released last month with the March survey. The consensus now expects real U.S. GDP growth to slow slightly to 2.9% and 2.8% in 2016 and ’17 respectively. Real DPI is forecast to growth 2.9% both years while real consumption spending will slow slightly to 2.7% in ’16 and 2.6% in ’17.