Stateside

Early Q4 we predicted that forecasters would revise their forecasts for 2011 GDP much higher. Consensus was then on the order of 2.3%. All did so, the average now something like 3.6%.

We also predicted early Q4 that consumer activity would continue to blow through estimates, Q1. Instead, we have seen a moderation from the surprising strength of Q4. Most, converted by results of Q4 and not anxious to be wrong once again, blame this on weather and gasoline prices. Maybe. We think these’s some “pause” in this too, that is, intent.

We have a slew of key releases this week, concluding with Feb Payroll on Friday.

Today we have seen that Jan spending rose 0.2%, only half of expectations.

Today we also saw the result of a Chicago purchasing manager survey, which shows manuf activity in the region surged in Feb, expanding at its fastest pace since Jul/88. All of the major manuf indexes were strong for Feb. This fits our anchor quite nicely.

Again, the risk to our view for the US real sector is that which is driven by events in the Mid East (see previous blogs). But even these events carry very positive implications for the US economy, years ahead.

Robert Craven