J.P. Morgan on Thursday lowered its tracking estimate on U.S. economic growth in the first quarter as durable goods orders rose less than forecast in December with core capital orders posting a surprise drop.
U.S. gross domestic product likely grew at a 1.50 percent annualized pace in the first three months of the year based on the latest durable goods data, slower than an earlier calculated rate of 1.75 percent, J.P. Morgan economist Michael Feroli wrote in a research note.
J.P. Morgan also reduced its estimate on gross domestic product in the final quarter of 2018 to 1.4 percent from an earlier estimate of 1.6 percent.
Despite the GDP downgrades for previous and current quarters, Feroli said he expects economic growth to rebound to 2.25 percent in the second quarter on a likely pickup in consumer and government spending.
"We continue to see modestly better times ahead," Feroli wrote. "Much of this (is) from the normalization of consumer and government spending from, respectively, the shocks of the December retail sales report and the federal government shutdown."
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