Economists raised their forecasts for third-quarter economic growth, reflecting upward adjustments to consumer spending and private investment, including capital outlays on artificial intelligence.<\/p>\n
Gross domestic product is now expected to expand at a 2.5% annualized rate in the third quarter, up from 2% in the previous survey, according to the latest Bloomberg News monthly survey of economists. Quarterly GDP projections through the end of 2027 were little changed and confined to a narrow 2%-2.2% range.<\/p>\n
Economists also made few adjustments to their inflation projections through next year. The personal consumption expenditures price index, excluding food and energy, is expected to average 3.2% this year before cooling to an average 2.5% in 2027 on an annual basis. <\/p>\n
With the so-called core PCE price metric showing moderating inflation, economists expect the Federal Reserve will keep interest rates unchanged through July of next year.<\/p>\n
\u201cTech\/AI related investment is the main factor driving higher business capex, while high-income household spending is responsible for the majority of consumer spending growth,\u201d said James Knightley, chief international economist at ING.<\/p>\n
According to Bloomberg Industry analysts, total capital expenditures related to artificial intelligence may exceed $1 trillion this year and $1.5 trillion in 2027.<\/p>\n
In addition, \u201ccooler jobs and inflation data and a sense new Fed Chair Kevin Warsh was less inclined to raise rates has seen pricing become less aggressive, with a September hike now seen as less than a 50% call,\u201d Knightley said.<\/p>\n
An escalation in the Iran war poses a risk to the outlook by threatening to push oil and consumer prices higher while potentially weighing on growth. With inflation above the Fed\u2019s 2% target, an extended supply shock would make policymakers\u2019 job harder.<\/p>\n
Economists also trimmed their estimates for average payroll growth this year to 66,000 a month and see similar monthly job growth in 2027. The Bloomberg survey of as many as 85 economists was conducted Aug. 14-19.<\/p>\n
Fanzeres and Morgan write for Bloomberg.<\/p>\n","protected":false},"excerpt":{"rendered":"Economists raised their forecasts for third-quarter economic growth, reflecting upward adjustments to consumer spending and private investment, including…\n","protected":false},"author":2,"featured_media":147357,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[24,3761,25,72366,72364,72365,3413,72362,27555,72367,16177,72363,29647,16799,72361,1423],"class_list":["post-147356","post","type-post","status-publish","format-standard","has-post-thumbnail","category-ai","tag-ai","tag-ai-investment","tag-artificial-intelligence","tag-average-payroll-growth","tag-bloomberg-survey","tag-chief-international-economist","tag-consumer-spending","tag-cool-job","tag-economist","tag-extended-supply-shock","tag-inflation","tag-james-knightley","tag-next-year","tag-rate","tag-strong-economic-growth","tag-target"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/147356","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/comments?post=147356"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/147356\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media\/147357"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media?parent=147356"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/categories?post=147356"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/tags?post=147356"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}