US Q1 GDP Estimate Revised Up After Upbeat Economic Reports

Note, too, that industrial production rebounded in March after a sharp decline in February, reportedly due to unusually cold weather. The manufacturing component led the recovery and more of the same is expected for the start to Q2, based on April survey data from two regional Fed banks (Philly Fed and New York Fed). In both cases, expectations for this month’s data point to ongoing strength.

Accelerating vaccinations and reopening businesses are adding to the optimism. But some economists worry that it’s all a macro sugar rush that will fade.

“I don’t see growth as being particularly durable,” warns Joseph LaVorgna, chief economist for the Americas at Natixis. “The economy is going to slow a lot more next year than people think and probably will be well under 3%.”

Perhaps, but expectations for a near-term acceleration are sucking up all the attention at the moment.

“We think the momentum continues into the second quarter,” predicts Brett Ryan, senior US economist at Deutsche Bank Securities. “It shows that the economy has significant momentum going into the summer.”

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Disclosures: None.

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