The sum of our data adds up to growth—in consumption, housing, and the service sector. Industrial activity appears to be stabilizing and, in some cases, expanding (chemicals), as we have been noting for a while now based on the turn in railcar loadings and recently confirmed via official data. A first-quarter growth rate of 2% for real GDP appears fairly certain. The second quarter is still a coin flip, but as we look further out, the implication from pricing in the Treasury market is that even 2% real growth over the next several years may be a stretch.
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