First-Quarter Blahs Hit Macro Forecasts Again

The consensus forecasts for the general economy slipped in the latest Blue Chip Economic Indicators survey released April 10, as the first-quarter “blahs” undercut the annual forecast again this year. The forecast for annualized growth of real domestic product in the U.S. in first quarter 2016 dropped 0.7 point to 1.3, which pushed the forecast for full-year growth down to 2%. The GDP forecast for 2016 has dropped nearly half a point since January. The economist also reduced their forecast for real GDP growth in 2017 by a tenth-point to 2.3%. Quarterly GDP growth is still expected to return to “trend” levels of 2.3% to 2.4% for the final three quarters of 2016.

More importantly for foodservice, the forecasts for growth of real disposable income and personal consumption expenditures fell only 0.1 point each for 2016 to 2.8% and 2.6% respectively, levels still considered positive for foodservice sales. In 2017, the consensus forecasts were unchanged at 2.5% real growth for both indicators.

On the international front, real 2016 GDP growth forecasts for most European economies and the Eurozone held steady with the exception of the United Kingdom, where the forecast fell 0.1 point to 1.9%. The outlook in Canada for this year rose slightly while that for Mexico fell slightly. The forecast for 2016 GDP growth in Japan fell 0.2 point while that in China rose 0.1 point.

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