GDP Outlook

Real GDP, Annualized Percent Change and Contributions


Real GDP grew during 2019 Q3 at a 2.1% annualized rate. Although slowed from Q2, consumer spending continues to drive growth. Moody’s forecasts real GDP to increase 2.3% YoY in 2019, slowing to 1.8% YoY in 2020.

GDP Growth Steady, but Slowing in 2020

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

Employment and Wages

Current Measures of the US Labor Market


Total nonfarm employment rose by 266,000 in November. Job growth has averaged 180,000 per month in 2019 through November, compared with an average monthly gain of 223,000 in 2018.

Slower Employment Growth Forecast for 2019 and 2020

As of early December, Moody’s forecasts private sector employment to increase 1.7% YoY in 2019, slowing to 1.0% YoY 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

Overall employment grew more slowly in 2019 than in 2018. Exceptions were Education and Health Services and Leisure and Hospitality—both grew nearly 2.5% in 2019 versus about 2% in 2018.

AWW Is Forecast to Increase About 4% Annually in 2019 and 2020

NCCI forecasts the annual average weekly wage (AWW) to increase by 3.9% in 2019 and 3.9% in 2020.

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

Financial Markets

At its December meeting, the Federal Reserve held steady the target range for the federal funds rate at 1.5% to 1.75% and indicated no further rate cuts during 2020. While Treasury yields beyond 2 years increased from Q3, the 10-year yield is still below its levels during the first half of 2019.

Yield Curve Gets Some Slope On

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