The gross domestic product (GDP) growth rate for the U.S. dropped to an annual rate of 2.6 percent in the fourth quarter of 2018, according to the February 28, 2019 report from the Department of Commerce. This number is a significant drop compared to the second and third quarter of 2018.
Some economic experts are pessimistic about the economic growth prospects in 2019. A growing number of economists are expecting a recession in 2020 or sooner with the Federal Reserve predicting the growth rate to slow down to 2.3 percent in 2019.
Forecasting firm Macroeconomic Advisers reduced its growth estimate for the first quarter of 2019 to 2.3 percent.
This pessimism is fueled by the decline in residential investment, retail sales and consumer confidence in December 2018 and the possibility of fiscal gamesmanship on the issue of debt ceiling and an escalation of trade tensions with China.
There are also experts who are optimistic about 2019, however.
The optimists have pointed out that the government shutdown did minimal long-term economic damage and consumer confidence has recovered in February after the return of federal workers to work. In addition, the Federal Reserve has decided not to raise interest rates and trade tensions with the Chinese have become less intense. Consumer spending is also expected to improve because of low oil prices, rising wages and low unemployment rate.
Michael Pearce of Capital Economics believes that all the fundamentals are there for a solid consumer recovery.