Consumer outlays are now forecast to grow at an annualized 4.5% pace in the current period, down nearly two percentage points from last month’s survey and a sharp deceleration from the sizzling 11.8% rate seen in the second quarter.

Bloomberg Economics also lowered their third-quarter consumer spending estimate, citing factors including a higher path for prices, lower volumes for vehicle purchases amid parts shortages, and some hangover after a stronger-than-expected, stimulus-fueled second quarter.

A softening pace of household demand paired with ongoing supply constraints weighed on expectations for economic growth. Gross domestic product is now seen rising 6.3% in the fourth quarter versus the same three months last year. That’s a downgrade from the 7.1% projection in the July survey.

Even so, the economy is still growing at a rapid pace. Averaging growth across the entire year, GDP is expected to post the strongest annual advance since 1984.

The survey was conducted August 6-12 and reflected responses from 64 economists.

With assistance from Olivia Rockeman.

This article was provided by Bloomberg News.

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