Despite a disappointing start to 2014, economic growth should rebound in the current quarter, said Research Director Dave Altig. About 250 bankers tuned in for the ECONversations webcast, during which Altig shared his take on the economic landscape for the rest of the year and fielded questions from viewers.
After first-quarter blip, economy back on track
The June 25 webcast came on the heels of a steeper than expected drop in gross domestic product (GDP) in the first quarter. Some unique circumstances were behind the 2.9 percent annual decline, including unusually severe winter weather and a sharp drop in health care spending, Altig noted.
Incoming data, meanwhile, are signaling stronger growth in the second quarter. The general view calls for growth closer to 3 percent for the balance of the year, and "so far, it looks like we're on track" he said.
Business investment poised for rebound
A key element of that forecast is a rebound in business investment, which includes spending by firms on equipment and software. Although capital expenditures made a strong contribution to GDP growth early in the recovery, they've come in below average in recent years, Altig noted. However, feedback from the Atlanta Fed's business contacts suggests there may be quite a bit of pent-up demand for such purchases.
On other topics, Altig noted:
ECONversations webcasts occur twice a year and are geared toward banking professionals.