US: Economy on a strong footing? - NBF

Thanks to a blistering second quarter, the U.S. economy now has a positive output gap for the first time since 2007, points out the research team at National Bank Financial.

Key Quotes

“While consistent with a late cycle, that’s not to say a downturn is imminent. Consumption spending, the main engine of the U.S. economy, is in excellent shape thanks to prior deleveraging and a solid labour market. Pro-cyclical fiscal stimulus from Washington should also help extend the expansion into 2019 and offset any drag from Fed interest rate hikes.”