The activity data for January and February suggest that the economy got off to a slow start to the year. Our calculations suggest that first-quarter GDP growth will be a modest 2% annualised. Consumption growth could be less than 1.5% annualised, as the unseasonably warm winter reduced demand for utilities and motor vehicle sales fell back from a 17-year high. But the recent strength of monthly employment gains and the marked improvement in the activity surveys strongly suggest that GDP growth will rebound in the second quarter. Even if the fiscal stimulus is delayed until next year or beyond, we still expect GDP growth to be 2.3% this year.
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