U.S. sees slow growth in Q1 but outlook still solid

The latest stream of soft data from the US prompted economists at Danske Bank to revise down GDP growth forecast for Q1 to 1.7% q/q AR from 2.7% previously. 
For the year as a whole, they now expect GDP growth of 2.8%, down from 3.0%.

Danske Bank notes its observations as follows:

• Following yesterday's retail sales report for February, we forecast private consumption growth at 2.8% q/q AR in Q1, assuming some rebound in Marchspending from the weather-induced weakness in February. 
  
  
• This is well below our previous expectation of 3.4% q/q AR private consumption growth this quarter. That said, real retail sales have actually not been that weak lately and it does seem that consumers have spent some of the money saved due to lower oil prices. 
  
  
• In January, real retail sales growth was 8.9% annualised over three months, but after the weak February data, the growth rate has come down closer to 4%. 
  
  
• We expect a rebound in the coming months and continue to look for private consumption growth around 4% q/q annualised in Q2.