Line chart showing quarter-over-quarter real GDP growth from Q1 2018 through Q1 2024 as well as Wells Fargo Securities estimates for real GDP growth through Q1 2025. GDP growth has come down from high levels in late 2020 and has recovered from Q1 2022 lows. GDP grew robustly in Q4 2023 but the growth rate fell in Q1 2024. GDP growth is expected to slow through 2025.
Sources: Bloomberg, Wells Fargo Securities, and Wells Fargo Investment Institute. Quarterly data from January 1, 2018, to March 31, 2024. Q2 2024 – Q1 2025 are Wells Fargo Securities forecasts, as of June 14, 2024. Forecasts are not guaranteed and are subject to change. GDP = gross domestic product. QOQ = quarter over quarter. SAAR = seasonally adjusted annual rate. Forecasts are based on certain assumptions and on views of market and economic conditions which are subject to change.
Key Takeaways
- Tighter liquidity conditions and the loss of post-pandemic supports to hiring, pent-up services demand, and to disinflation are the principal threats to satisfactory economic growth during the balance of 2024.
- We expect slowing economic and profits growth, combined with higher interest expenses tied to increased financing costs, to create headwinds for further stock gains later in 2024.