Change in U.S. GDP
Left Y-axis: Real GDP (QoQ% SAAR), right y-axis: Real GDP (QoQ% SAAR); x-axis: quarterly, 2015 Q2 – 2022 Q2 (E)
Line shows GDP or GDP estimate from Wells Fargo Securities.
U.S. GDP for most of this time period has been positive, fluctuating between a high of 3.9% (Q4 2017) and a low of 0.6% (Q4 of 2015). In Q4 2019 GDP was just above 2% but fell to more than -5% at the end of Q1 2020. By Q2 GDP declined by more than -31%, followed by a sharp recovery to more than 33% in Q3, moderating to 6.7% by Q2 2021.
The Wells Fargo Securities estimates for 2021 and Q1 2022: Q3 4.6%, Q4 5.7%, Q1 2022 4.2% and Q2 2022 4.1%.
Sources: Bloomberg, Wells Fargo Securities, and Wells Fargo Investment Institute. Quarterly data from April 1, 2015 to June 30, 2021. Q3 2021–Q2 2022 are Wells Fargo Securities forecasts, as of September 9, 2021. Forecasts are not guaranteed and are subject to change. GDP = gross domestic product. QoQ = quarter over quarter. SAAR = seasonally adjusted annual rate.
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Key Takeaways
- Successive rounds of economic stimulus during the opening months of 2021 propelled strong economic and earnings growth through midyear, a key engine behind the latest leg of the stock market’s rally.
- Strong economic growth risks overheating, which adds to uncertainty over the outlook for inflation, Federal Reserve policy, interest rates, and, ultimately, stock and bond prices.