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Wells Fargo: Downside risks for US economic outlook

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According to analysts from Wells Fargo, last week mixed US data points to a slower pace of economic growth during the last months of 2015, but they expect GDP growth to remain above 2.0% in 2016.

Key quotes are as follows:

  • “We have written on numerous occasions that sectors closely tied to the global economy and energy (trade, mining and manufacturing) will continue to be challenged; however, areas of the US economy related to domestic demand (residential) should continue to improve this year.”
  • “Worries about China‚Äôs economy are also building. We continue to beat the drum that the direct economic and financial exposure of the US to China is fairly limited; but, the financial markets are feeling the weight of the indirect effects.”
  • “That said, our heads are not in the sand, and we acknowledge that US economic growth has slowed. We now project real GDP likely grew at just 0.4 percent pace in the fourth quarter, with recent economic releases suggesting there are downside risks to our already weak economic forecast.”
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