The surge in US economic output in the second quarter is expected to moderate in Q3, based on a set of nowcasts compiled by The Capital Spectator. The median estimate continues to anticipate a healthy 3.2% increase for Q3, slightly below the median projection in late-August.

Assuming that the economy has entered an extended run of substantially stronger economic activity remains open for debate, at least by the standard in Q2 – output grew 4.2% in the previous quarter, a four-year high.  By some accounts, the Q2 is set to mark a peak for economic activity for the foreseeable future.

“Downside risks are likely to remain a key focus over the months ahead,” advises Robert McAdie, global head of strategy research for BNP Paribas. “Global economic growth looks more challenging for 2019 than 2018,” he predicts via Forbes, pointing to “fading tailwinds” and the China-U.S. trade war.

Perhaps, but the latest numbers still lay a foundation for projecting a healthy rate of expansion in US economic activity in the government’s Q3 GDP report that’s scheduled for release late next month.

Economists are certainly upbeat. Yesterday’s release of The Wall Street Journal’s economic survey data for September calls for a 3.2% gain in the July-through-September period, based on the average forecast.

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The Journal’s estimate matches the median projection per the Q3 numbers in the graph below. As such, a 3.2% gain is a reasonable working assumption until or if the incoming data offer a reason to adjust expectations.

Meantime, there’s still a compelling case for assuming that the nine-year-old expansion is on solid ground to roll on. Last week’s report on employment for August certainly supported a positive outlook. Private payrolls increased at a healthy 1.9% annual pace last month – the sixth straight month at that rate.

The future’s uncertain, of course, but the numbers in hand paint an encouraging profile for the US economy. Expecting 4%-plus growth on a sustained basis is expecting too much, but it’s no less wishful at this stage to argue that the macro trend is headed for trouble in the near term.

A fair amount of the positive trend of late can be attributed to fiscal stimulus via the Tax Cuts and Jobs Act of 2017 that was enacted late last year. The related economic boost will fade in the quarters ahead, but for the moment the extra juice is coursing the economy.

The main risk at the moment is the potential for blowback if the trade war between the US and China escalates. As the Journal reported yesterday, “Tariffs have yet to meaningfully affect the US economy because of the relatively small amounts imposed so far, but trade tensions remain the biggest risk to the economic outlook, according to forecasters surveyed by The Wall Street Journal.”

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