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21 Mar 2016
USD: Markets exaggerated the risk of a US recession - BBH
Research Team at BBH, notes that the US economy is not only averting a recession, but growth accelerated in Q1.
Key Quotes
“The markets exaggerated the risk of a US recession. The US reports its third estimate of Q4 GDP. It is too historical to matter much, and whether it is 1.0% as the first revision indicated or 0.7% at an annualized pace, as the initial estimate had it, is essentially the same thing: poor.
However, evidence accumulating that the US economy is accelerating in Q1 16, not slowing further. Moreover, the slowdown in the manufacturing sector appears to be ending. Capital expenditures are improving though it may be hard to see it in durable goods orders report next week.
The headline will be dragged lower the sharp decline in Boeing orders. However, stripping out transportation and defense, and looking at durable goods shipments as well, a recovery will likely be evident. Last week's Philly and Empire State manufacturing surveys that cover March also point to gains. The PMI, and later the ISM data will be expected to confirm a recovery.”
Key Quotes
“The markets exaggerated the risk of a US recession. The US reports its third estimate of Q4 GDP. It is too historical to matter much, and whether it is 1.0% as the first revision indicated or 0.7% at an annualized pace, as the initial estimate had it, is essentially the same thing: poor.
However, evidence accumulating that the US economy is accelerating in Q1 16, not slowing further. Moreover, the slowdown in the manufacturing sector appears to be ending. Capital expenditures are improving though it may be hard to see it in durable goods orders report next week.
The headline will be dragged lower the sharp decline in Boeing orders. However, stripping out transportation and defense, and looking at durable goods shipments as well, a recovery will likely be evident. Last week's Philly and Empire State manufacturing surveys that cover March also point to gains. The PMI, and later the ISM data will be expected to confirm a recovery.”