‘Significant’ risk of the US economy shrinking this quarter, BofA warns
Economists at Bank of America (BAC) said in a report to clients they now expect US gross domestic product to increase at an annual rate of just 1% during the first three months of this year.
That’s a sharp downgrade from the bank’s prior call for 4% growth in the quarter. And yet it could prove to be optimistic.
“Risks of a negative growth quarter are significant, in our view,” Bank of America economists warned clients in the report.
That would break a streak of six consecutive quarters of growth that began in the summer of 2020.
The Atlanta Federal Reserve’s GDPNow forecasting model, released on Friday, is calling for 0.1% growth in the first quarter. That would be a rapid slowdown from the 6.9% annual rate of growth during the final quarter of 2021.
For the year as a whole, Bank of America now sees GDP growth of 3.6%, down from its prior expectation of 4%.
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