US 4Q GDP: Growth likely to register a below-trend pace - Wells Fargo

On Friday, 4Q GDP growth data will be released. Analysts from Wells Fargo, point out that during recent year Q4 readings had been weak and they see growth rate below 2.0%. 

Key Quotes: 

“Recent years have shown weak first and fourth quarter GDP readings followed by stronger growth in the second and third quarters due largely to residual seasonality. In 2016, real GDP growth is expected to follow this pattern, but also show somewhat muted second quarter real GDP growth as inventories shaved off more than one percentage point from the headline. We suspect that fourth quarter real GDP growth will again register a below-trend pace, with residual seasonality playing some role, but it will not be the only actor in this play.”

“Trade is expected to detract more than one percentage point due to a one-off surge and subsequent collapse in soybean exports. Following two quarterly declines, residential investment should register a positive reading as base effects help propel growth into the double-digits. With the drag from mining due to the oil collapse largely behind us, business fixed investment should also contribute to the headline real GDP growth.”