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BBVA Research publishes Economic Outlook for June 2019

- Baseline growth forecast unchanged: While the baseline growth forecast remains unchanged, the risks to the downside are growing.

- Recession probability at 60 percent: Model-based recession projections suggest a probability of approximately 60 percent over the next 24 months.

- Rate cuts expected in 3Q19: The Fed is preparing markets for likely rate cuts in the third quarter of 2019.

HOUSTON, July 3, 2019 /PRNewswire/ -- According to the latest Economic Outlook published this week by BBVA Research, GDP growth has decelerated in 2Q2019, but a rebound in consumption should support moderate growth rates in 2H2019. Survey-based investment indicators are also declining amidst deteriorating business expectations. In addition, countervailing trade dynamics -- weaker global growth versus reduced trade tensions -- imply there will be no material change in the net export balance.    

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The unemployment rate held steady at 3.6 percent in May, and the labor force participation rate and unemployment-population ratio also remained unchanged at 62.8 percent and 60.6 percent respectively. The team anticipates job growth to continue with modest declines in the unemployment rate for the remainder of 2019. Average monthly job growth is expected to slow to 166,000 this year, down from 223,000 in 2018.

According to the report, the Fed is expected to cut rates in the third quarter 2019. This is based on elevated policy uncertainty, renewed cross-currents, and the threat of inflation drifting below the Fed's two percent target. 

Headline consumer prices increased 0.1 percent month-over-month in May, after rising 0.3 percent in April. The 12-month change in the headline consumer price index (CPI) slumped below 2 percent again to 1.8 percent, while the core CPI continued to decelerate, reaching 2.0 percent in May.  In addition to the slowdown in energy prices, used cars and trucks, and motor vehicle insurance prices decelerated, dragging down headline CPI.

The June Economic Outlook, authored by BBVA Research Senior Economist Boyd Nash-Stacey, also features a view of the labor market, interest rates, oil prices, and inflation for 2019.  For more details, read the full report here

Learn more about BBVA Research here and BBVA USA here.

For more BBVA news visit, www.bbva.com and the U.S. Newsroom.

Additional news updates can be found via Twitter and Instagram.

For more financial information about BBVA in the U.S., visit bbva.investorroom.com.

About BBVA

BBVA Group
BBVA (BBVA) is a customer-centric global financial services group founded in 1857. The Group has a strong leadership position in the Spanish market and is the largest financial institution in Mexico. It has leading franchises in South America and the Sunbelt Region of the United States. It is also the leading shareholder in Turkey's BBVA Garanti. BBVA's purpose is to bring the age of opportunities to everyone, based on our customers' real needs: provide the best solutions, helping them make the best financial decisions, through an easy and convenient experience. The institution rests in solid values: Customer comes first, we think big and we are one team. BBVA's responsible banking model aspires to achieve a more inclusive and sustainable society.

In the U.S., BBVA is a Sunbelt-based financial institution that operates 641 branches, including 329 in Texas, 89 in Alabama, 63 in Arizona, 61 in California, 45 in Florida, 37 in Colorado and 17 in New Mexico. The bank ranks among the top 25 largest U.S. commercial banks based on deposit market share and ranks among the largest banks in Alabama (2nd), Texas (4th) and Arizona (6th). In the U.S., BBVA has been recognized as one of the leading small business lenders by the Small Business Administration (SBA) and ranked 8th nationally in terms of dollar volume of SBA loans originated in fiscal year 2018.


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