GDP Growth Trends

📊 The US economy continues to expand — but the foundations of that growth are shifting. 📉 Real GDP growth slowed sharply to 0.7% (annualized) in Q4, bringing full-year 2025 growth to 2.1% despite an extraordinary combination of supply shocks: trade policy upheaval, rapid AI adoption, and a historic collapse in immigration. Much of the late-year slowdown reflected the longest government shutdown in US history, but private demand also softened modestly. 🛍️ Consumers are still spending, but they are becoming far more selective. Spending rose 0.4% m/m in January, yet real consumption increased just 0.1%, with households rotating away from tariff-impacted and higher-priced goods. Outlays are increasingly concentrated in “must-do” services such as housing, utilities, healthcare and insurance, while discretionary categories like travel, restaurants and leisure are seemingly losing momentum. 💰 The income foundation supporting consumption is fragile. Real #consumer spending is growing 2.4% y/y, but real disposable income is expanding at a slower 1.8% pace. This gap suggests resilience in consumption is increasingly sustained through tighter budgeting and spending selectivity rather than stronger income growth. ⚙️ Meanwhile, #productivity — not hiring — is driving the expansion. The economy added only 116,000 jobs in 2025, yet output continued to expand as firms focused on efficiency in a high-cost, high-interest-rate environment. Productivity has grown at a 2.2% annualized pace since 2019, supported by operational discipline and increasingly by #AI investment. 📈 Inflation pressures also remain stubborn. Core PCE #inflation accelerated to 3.1% y/y in January, and short-term momentum suggests underlying price pressures were already firm before the recent energy shock tied to the #MiddleEast conflict. ⚠️ Looking ahead, the US economy faces a new set of crosscurrents. Higher energy prices, tighter financial conditions and elevated geopolitical uncertainty are likely to push inflation temporarily higher this spring while weighing on growth. The expansion is continuing — but it is becoming more uneven, more selective and more sensitive to supply shocks. We have revised our #GDP growth forecast to 2.0% in 2026. EY-Parthenon EY Lydia Boussour

The Weight of Numbers and the Truth Beneath Them At first glance, India’s 105% GDP growth between 2015 and 2025 looks like the headline of the decade. A nation doubling its economic size in ten years — $2.1 trillion to $4.3 trillion — it sounds like destiny catching up with potential. But zoom out, and perspective quietly reshapes the story. In the same decade, the U.S. added six Indian economies — a $12 trillion leap, growing from $18.3 to $30.3 trillion. That’s the kind of expansion that doesn’t shout; it hums. A slow, steady, compounding rhythm of mature capital, deep infrastructure, and unmatched consumer confidence. While India’s rise is exponential in percentage, America’s is monumental in absolute scale. This is where numbers get philosophical. Percentages thrill; absolutes reveal. The base effect flatters the emerging, but true power hides in the delta. What the U.S. added in one decade equals more than the total GDP of Japan, Germany, and the U.K. combined. That’s not just growth — that’s gravitational pull. China’s story sits in the middle — adding $8.4 trillion over ten years, a 76% rise. Still a powerhouse, but signs of deceleration peek through. The dragon’s flight continues, but with heavier wings — demographics, debt, and deflation quietly weighing it down. Japan, meanwhile, stands still. A decade of zero growth — $4.4 trillion then, $4.4 trillion now. It’s not decline, but stasis — a sobering reminder that innovation alone doesn’t guarantee expansion when demographics and deflation tie you to the ground. Europe’s performance tells another story: resilience with restraint. Germany (up 44%), France (38%), Italy (39%), the U.K. (28%) — all steady, but cautious. Growth without exuberance. Progress without propulsion. And then there’s India, defying gravity. A young population, digitized services, and entrepreneurial pulse are pushing the economy forward at a scale few imagined possible a decade ago. But it’s still a climb — infrastructure gaps, uneven distribution, and fiscal tightropes remain part of the story. The promise is real, but so is the distance. The U.S. remains the benchmark. Its growth may not glitter in percentages, but it compounds quietly across innovation, capital markets, and global influence. Every additional trillion isn’t just GDP — it’s trust, stability, and leadership priced in. So, yes — India is rising. The U.S. is deepening. China is adjusting. Japan is pausing. Europe is pacing. And behind these numbers lies a world reorganizing its economic order — not through revolutions, but through quiet compounding. The real lesson? Growth rates & percentages excite headlines. But absolute growth builds empires. DC*

India’s Q1FY26 GDP grew 7.8% YoY, but there’s a lot to look beyond the headline numbers. India’s GDP growth was well above consensus of 6.7%. But this upside surprise was largely statistical — driven by the lowest GDP deflator since 2019, front-loaded government spending, and early exports. 𝗕𝗲𝗻𝗲𝗮𝘁𝗵 𝘁𝗵𝗲 𝘀𝘂𝗿𝗳𝗮𝗰𝗲, 𝗱𝗲𝗺𝗮𝗻𝗱 𝘀𝗶𝗴𝗻𝗮𝗹𝘀 𝘄𝗲𝗿𝗲 𝗺𝗶𝘅𝗲𝗱: • Private consumption improved to 7%, and government spending rebounded to 7.4%. • Rural demand showed early signs of revival (agriculture at 3.7%). • Policy moves like GST rationalisation, tax cuts, and RBI’s rate easing could provide a buffer ahead. • Yet, high-frequency data — auto sales, production trends — reflected softening momentum. 𝗖𝗼𝗿𝗽𝗼𝗿𝗮𝘁𝗲 𝗘𝗮𝗿𝗻𝗶𝗻𝗴𝘀: 𝗦𝘁𝗶𝗹𝗹 𝗪𝗲𝗮𝗸 • BSE500 PAT grew 9.9% YoY; Nifty50 PAT 7.9% YoY — the fifth straight quarter of single-digit growth. • Earnings bottoming is expected, but recovery will likely be gradual and uneven, led by discretionary and industrial sectors. 𝗦𝗲𝗰𝘁𝗼𝗿𝗮𝗹 𝗗𝗶𝘃𝗲𝗿𝗴𝗲𝗻𝗰𝗲 • Strength: Energy, Materials, Telecom, Real Estate delivered double-digit growth. • Weakness: Consumer Discretionary & Staples lagged, with subdued demand visible. • Chemicals and Cement are showing early margin recovery, hinting at churn in sectoral profit pools. 𝗪𝗵𝘆 𝗖𝗼𝗻𝘀𝘂𝗺𝗽𝘁𝗶𝗼𝗻 𝗖𝗼𝘂𝗹𝗱 𝗣𝗶𝗰𝗸 𝗨𝗽 • GST rationalisation and income tax cuts are expected to lift household disposable incomes. • RBI’s front-loaded rate cuts should aid financing-driven consumption. • Rural recovery, if sustained, can add to demand momentum. 📌 Takeaway: Q1FY26 highlights the gap between headline GDP and underlying demand. Consumption remains the key variable to watch, and while earnings may have bottomed, the path to recovery looks more measured than euphoric. #IndiaEconomy #Q1FY26 #GDPGrowth #CorporateEarnings #MarketAnalysis #Consumption

U.S. GDP Q1'24 revised lower Softer overall demand and lower inflation in the first quarter should be more of a relief for the Fed and the market rather than a concern. Most of the downward revision came from consumer spending, partly due to the holiday spending hangover that we had predicted, and partly due to the overall cooling of demand for durable goods. 📊 Aside from that, the underlying final sales data remained rock solid. While pandemic excess savings might be low for some households, many Americans have continued to enjoy another quarter of strong income growth. Gross domestic income, another key metric from the report, grew 1.5%, a testament to the strong labor market we had in the first quarter. 📈 We expect total GDP to rebound in the second quarter, ranging between 2.4% to 3.0%, as the volatile components such as inventories and net exports show improvement. Additionally, slower inflation and solid wage growth should be key factors supporting overall spending in the second quarter. 💼 Initial jobless claims, a proxy for layoffs and labor market tightness, continue to stay within a healthy margin, signaling a gradually cooling labor market rather than the steep decline that many had predicted. 🚀 Given the recent economic data, we believe the economy is getting close to a soft landing as growth approaches its long-term trend. However, we think that the post-pandemic economy will likely arrive at a new normal where inflation, while under control, will remain higher than the 2% target for much longer than many had expected due to factors that monetary policies cannot effectively address. If the Fed wants to stay ahead of the curve this time, we think rates should be lowered sooner rather than later.

📈 DEAN Series: Interpreting GDP for Smarter Energy and Economic Decisions Every form of economic activity depends on energy—and energy demand, in turn, is shaped by the health of the broader economy. GDP trends influence inflation, job growth, trade, and investment decisions across sectors. Whether you're in energy, finance, policy, or business, understanding where the economy is headed is essential. With TXOGA’s Quarterly Energy Economics Review covering deeper technical topics, I’ve also received questions about how to make sense of the mainstream indicators we monitor. That’s why I’m launching a new series: Demystifying Energy Analysis and Navigation (DEAN) This first installment takes a closer look at GDP—how it's measured, where the global economy stands, and what it means for energy demand and long-term planning. 🔹 1. Why GDP matters. GDP is more than a headline—it’s the foundation for understanding economic well-being. It directly captures spending, investment, and trade, and indirectly signals inflation, jobs, corporate profits, and real income. Energy demand, particularly for oil and natural gas, has long tracked closely with GDP growth. 🔹 2. How we measure it. We use IMF GDP data in U.S. dollars using market exchange rates (MER)—not purchasing power parity (PPP). MER avoids overstating the size of emerging markets (which PPP can inflate ~3x), offering a more grounded perspective for global energy modeling. 🔹 3. What it shows today. Global GDP averaged 3.0% from 2022–2024 but is slowing. The IMF now forecasts 2.4% growth for 2025–2026—nearing recessionary territory, especially given its typical optimism. The outlook still assumes: 4.0% growth in China, 1.8% in the U.S., and 0.6% in Japan. Yet the U.S. economy contracted in Q1, even with consumption pulled forward in anticipation of trade policy changes. 🔹 4. What to watch. Though GDP itself hasn’t signaled a downturn, warning signs are flashing: • U.S. consumer sentiment is at historic lows • Loan delinquencies (90+ days) are rising • Global trade volumes are expected to fall • Bond yields are climbing • The U.S. dollar is down over 6% YTD High-frequency indicators like the Philadelphia Fed’s ADS index point to clear deceleration—not collapse, but enough to raise red flags, especially with structural shifts on the horizon. 🔹 Key takeaways •   GDP trends are central to energy and economic planning •   Measurement methods matter for interpreting global demand •   Slowing growth suggests mounting risk across markets •   Leading indicators reveal more strain than headlines suggest •   Long-term energy investment must account for structural shifts More to come in the DEAN series as we bridge macroeconomic signals and energy market implications. #EnergyEconomics #OilAndGas #GDP #DEAN

US GDP Accelerates to Fastest Pace in Two Years and Surges Past Expectations This morning, the U.S. Bureau of Economic Analysis released its initial estimate of third-quarter economic growth, showing the U.S. economy expanded at its fastest pace in two years and significantly outperformed expectations. The report provides the first complete snapshot of economic activity for the quarter after earlier releases were delayed by the recent government shutdown. According to the BEA, real gross domestic product increased at a 4.3 percent annual rate in the third quarter, well above consensus forecasts near 3.3 percent and faster than the 3.8 percent pace recorded in the second quarter. GDP measures the inflation-adjusted value of all goods and services produced in the economy and is the broadest indicator of overall economic activity. The composition of growth helps explain the upside surprise. Consumer spending remained the primary engine, reflecting continued household demand for both goods and services. Exports and government spending also contributed positively. These gains were partly offset by a decline in private investment, signaling that businesses remain cautious even as overall output accelerates. Imports fell during the quarter, which mechanically added to headline GDP growth. The report also included updated inflation measures that add important context. The personal consumption expenditures price index excluding food and energy, the Federal Reserve’s preferred gauge of underlying inflation, rose at a 2.9 percent annual rate in the third quarter, up from 2.6 percent previously. Overall PCE inflation increased to 2.8 percent, suggesting that progress on inflation has become less consistent even as growth strengthens. Taken together, the message is clear. Economic growth surprised meaningfully to the upside, demonstrating resilience and momentum, while underlying inflation pressures firmed rather than eased. Growth is proving stronger than expected, but inflation is not yet fully cooperating. This combination matters for monetary policy. Faster-than-anticipated GDP growth reduces the urgency for the Federal Reserve to support the economy through rate cuts, while firmer core inflation reinforces the case for patience. Even as some segments of the economy show signs of cooling, this data argues against a rapid shift toward easier policy. For households, the signal is mixed. Strong growth supports employment and income, helping sustain spending. At the same time, persistent inflation continues to strain affordability and weigh on confidence. Consumers remain active, but increasingly selective, adjusting behavior rather than pulling back outright. Havas Edge tracks GDP closely because it anchors expectations for policy, confidence, and consumer behavior.

Q1 GDP rose at a 2.0% annualized pace this morning, slightly below the 2.3% consensus and our own forecast. Some headlines may label it a disappointment. They are wrong. Q1 had to overcome a brutal February, an oil shock from the war with Iran, and the residual drag from last fall's federal shutdown. The Atlanta Fed's GDPNow had drifted as low as 0.5% in mid-April. A 2.0% print after all of that is a reassuring sign that the U.S. economy can absorb a meaningful energy shock and a difficult winter without rolling over. The cleaner read is real final sales to private domestic purchasers, which rose 2.5%, in line with the underlying trend that has held since mid-2023. This morning's labor market data confirm the story. Initial jobless claims fell to 189,000, the lowest in months. When weekly jobless claims line up with what real final sales are saying about underlying demand, the case for resiliency is much stronger than the GDP headline alone suggests. A few takeaways worth thinking about: → Business investment surged 10.4%, driven by the AI buildout and reshoring → Services consumption is moderating as gas prices pull discretionary dollars away from restaurants and travel → Slower voluntary turnover is a quiet productivity tailwind worth watching → We continue to look for Q2 growth at 2.8% The expansion is intact. The questions are about pace, not direction. Full analysis here: https://lnkd.in/eXy7t-Hi What are you seeing in your business or sector? Is the consumer slowdown showing up in your numbers yet? #Economy #GDP #Markets #FederalReserve #LaborMarket

US GDP has a breadth problem In Q1, real GDP rose 2.0 percent SAAR, a touch short of estimates. That's consistent with the Fed's latest estimate of long-run potential. Private domestic demand was solid, climbing 2.5 percent SAAR. However, the distribution of growth in the private sector is not especially encouraging. Nonresidential structures and residential investment both declined over the quarter. Consumer spending advanced just 1.6 percent SAAR with a decline in goods and cyclical parts of services like food services & accommodations and recreation. The growth in private demand comes primarily from information processing equipment and software. Looking ahead, I’d point out three things. First, nominal compensation growth is slowing – in the 12 months ending in March, compensation is up just 4.1 percent. Wages and salaries are up a similar amount. Second, consumer prices will continue to rise. Retail gas prices continued rising through April. Thus, look for a continued decline in real incomes net of transfers. This is not a good combination for household consumption. Third, on the positive side, there is probably more room for inventory investment to add to GDP growth in the quarters ahead. Stepping back, the US economy has a breadth problem. Growth in sectors outside the ones adjacent to technology remains weak. Households are likely to remain under stress through Q2 given ongoing increases to retail gasoline prices.

Where is India's growth headed? According to estimates, assuming consistent government priorities after the general elections in 2024, India should see a double boost from investment with continued public capex and a gradual recovery in private capex. This should result in a multiplier effect on the economy, with output expected to increase by at least four times the amount of capex. In our baseline scenario, India is expected to register a CAGR of around 7% between FY25 and FY30. This would be the strongest growth phase since FY10 and close to the accelerated growth observed during the FY03-FY10 period. If India wants to double its nominal GDP over the next decade, then nominal GDP growth (in USD terms) has to rise at 7% CAGR, which is believed to be within reach. Moreover, investment and productivity-driven growth over the medium term should help contain inflation. This is expected to lead to higher net exports, contributing to an improvement in the structural current account deficit (CAD). The increased flow of foreign direct investment should also help make the funding of this deficit easier and improve the basic BoP (CAD plus net FDI) balance over the medium term. Overall, it seems like India is headed towards a period of strong and sustainable growth.

The UK’s Economy: Growth Stalls, Uncertainty Grows The latest GDP figures show the UK economy grew by just 0.1% in Q3, a sharp slowdown from 0.5% in Q2 and 0.7% in Q1. While construction rebounded (+0.8%), production fell (-0.2%), and real GDP per head declined 0.1%. Services, the UK’s largest sector, saw modest growth (+0.1%), with professional and technical industries leading the way (+0.7%). The Chancellor’s reforms to boost investment are a step forward, but higher taxes in the latest Budget could dampen growth and household spending. Although inflation is stabilising, real incomes remain squeezed. Globally, challenges loom large. A possible return of "America First" policies under President Trump could disrupt global trade flows and impact GDP growth worldwide. How might UK businesses navigate this uncertainty in the years ahead? Closer to home, the ONS highlighted cautious optimism on wages, which grew 4.8% annually (excluding bonuses), the slowest in two years but still above inflation. Unemployment, however, rose to 4.3%, adding to concerns about employment prospects. Despite subdued growth, household spending rose 0.5%, driven by housing, clothing, and miscellaneous expenses. But will rising taxes and higher costs reverse this trend? Economic forecasts paint a mixed picture: ➡️ GDP growth: 1.1% in 2024, peaking at 2.0% in 2025, slowing to 1.6% by 2029. ➡️ Inflation easing, but household pressures likely to persist into the late 2020s. A mixed bag - uncertainty over 2025 will continue largely driven by events outside of the UKs direct control.... https://lnkd.in/etPYPq45