Salient to Investors:
The median economist expects GDP to rise at a 3 percent annualized rate in Q1, fall to a 1.5 percent pace in Q2, and accelerate to a 2.4 percent rate in half2 2013, and 970,000 housing starts in 2013 , the most since 2007.
Vincent Reinhart at Morgan Stanley raised his forecast to 3 percent rate of growth in Q1 and was surprised that there was not a bigger and more immediate hit to spending by sequestration and the tax increase. Reinhart said house-price appreciation and rising stocks are creating wealth and helping spending.
Bruce Kasman at JPMorgan Chase raised his to forecast to a 3.3 percent rate as the economy held up surprisingly well in Q1 as households responded to the higher taxes by saving less. Kasman said the fundamentals look firmer, business is looking healthy, and is predicting 1.5 percent growth rate in Q2, 2 percent in Q3 and 2.5 percent in Q4.
The saving rate dropped to 2.2 percent in January, the lowest since August 2007, and 2.6 percent in February from 6.5 percent in December 2012.
The EIA said the US produced 84 percent of its own energy in 2012, the most since 1991, and 88 percent in December 2012. US oil production of crude oil in Q4 2013 will exceed imports for the first time since 1995.
Goldman Sachs expects sequestration to cut 0.75 percent from growth in Q2 and Q3.
Neil Dutta at Renaissance Macro Research doesn’t understand why people think the economy will be stuck at a 2 percent rate for the rest of 2013 since it grew at that pace in the first 3 years of the expansion while housing was contracting, state and local governments were cutting spending, households were trimming debt, and Europe was in a recession – 3 of which are now poised to contribute to growth. Dutta expects companies to spend more freely as concern over the economy dissipates and says Q1 growth won’t be the highest in 2013.
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