As key measures of the economy come in softer than expected, forecasts for US growth in the first quarter are falling across the board.
Citing weaker spending at stores, restaurants, and online, the Atlanta Federal Reserve’s closely-watched GDPNow forecast model for the first quarter was trimmed on Monday to an annualized rate of 0.2%. Previously, it was at 0.5%.
Earlier Monday, the Commerce Department reported a slight recovery in retail sales at the beginning of 2019 but sharply lowered previous figures. After revisions, December's retail sales fell 1.6% to mark the biggest drop in a decade.
Most other forecasts for growth in the first quarter are more optimistic — the New York Federal Reserve's estimate was at 1.4% on Friday — but market watchers are remaining cautious in wake of disappointing economic data.
Barclays, for example, lowered its forecast from 2.5% to 2% on Monday.
"Further downward revisions to December’s data came as a surprise to us, and point to a slower momentum in consumption spending heading into Q1," the analysts said in a research note.
The most recent jobs report didn't help to calm concerns. On Friday, the Bureau of Labor Statistics said the US economy added 20,000 nonfarm payrolls in February, the fewest of any month since September 2017 and far below expectations for an increase of 180,000 jobs.
Still, some see recent economic results as little more than month-to-month noise. Gross domestic product estimates can vary widely and are subject to revisions.
Recent data could also point to seasonal flukes rather than a downward trend, according to Eric Winograd, a senior economist at AllianceBernstein. Like many others, he expects growth to rebound over the medium term.
"I see no cause for alarm," he said.
