GDP Outlook

Real GDP, annualized percent change and contributions


Real GDP growth in 2019 Q2 slowed to a 2% annualized rate. Strong consumer spending was offset by reductions in private investment and net exports. Moody’s forecasts real GDP growth of 2.3% for the full year 2019 before slowing to 1.7% in 2020.

GDP Growth Slowing Into 2020

Sources: US Bureau of Economic Analysis (BEA); Moody’s Analytics

Employment and Wages

Current measures of the US Labor Market


Year-to-date employment growth is slower than in 2018. August nonfarm employment is increased by 25,000 temporary government hires to work on the 2020 Census. Unemployment rates have held steady during 2019.

Employment Is Forecast to Grow More Slowly in 2019 and 2020

Moody’s forecasts private sector employment to increase by 1.7% in 2019 before slowing to 0.8% in 2020.

* Average hourly earnings are shown as annualized growth rates for private industry workers. The Atlanta Fed Wage Tracker is the 3-month moving average of median wage growth; this series is wage growth of workers who have been continuously employed.

Employment Growth Is Broadly Based Across Economic Sectors

Employment growth is broadly based across economic sectors. For 2019 to date, annualized employment growth rates of 1.4% and 3.1% in Manufacturing and Construction are below 2.0% and 4.6% for 2018.

AWW Is Forecast to Grow Steadily in 2019 and 2020

NCCI forecasts the annual average weekly wage (AWW) to increase by 4.2% in 2019 and 3.8% in 2020.

Sources: US Bureau of Labor Statistics; Bureau of Economic Analysis; Atlanta Federal Reserve Wage Tracker; Moody’s Analytics; NCCI

Financial Markets

The Federal Reserve cut the Fed Funds target rate to 1.75% in September. Yields on Treasury maturities from 2 to 10 years have been at or below that level since early August. Corporate bond spreads have held stable, while municipal spreads have tightened since Q1.

Interest Rates: Lower Still

Sources: US Department of the Treasury; Federal Reserve Board of Governors; Bloomberg