2019 US Economy and Consumer Credit Outlook
Dec 19, 2018
2018 overall is not a bad year for the U.S when it comes to economy growth. Even the monetary policies tightened by Fed, the U.S. economy, with the help of fiscal measures, has been outperforming other developed economies in 2018: The GDP growth accelerates, thanks to the tax cut, to 3.5%, 4.2%, and 2.2% respectively for the first three quarter of 2018. Labour market remain healthy and the unemployment rate is at historic low of 3.7%. Earning growth rate has raised to above 3% the first time since 2010 while inflation rate is around 2%. We maintain our base case projection of GDP growth in 2018 and 2019 at 3.0% and 2.5% respectively. We acknowledge that there will be headwinds such as trade wars, wider budget deficit in 2019. However, we believe the US economy will stay sound and labour market remain healthy with the support of tax cut benefits, possible infrastructure spending, and anticipated slow-down of interest rate hiking.