DAVID WOO: The Economy In March Will Be 'Decisively Slower' And There's Already One Worrisome Sign

David Woo

Photo: Bank of America

 The economic data from last week was strong.

Goldman Sachs sees a “tantalising prospect” that the U.S. economy may already be over the hump and that growth will accelerate this year, proving wrong the naysayers who said that the end of the payroll tax holiday and the sequestration would be a blow to the recovery.

We thought this was interesting, because back in early February, BofA strategist for FX and rates David Woo said that the U.S. economy was about to see the “moment of truth.” At the time he reckoned that the data over the coming weeks would show whether the U.S. recovery would survive or not.

So we asked Woo what he thought of the latest good data that has the market and folks like Goldman Sachs so excited.

He remains sceptical.

Via email he writes:

The Feb data have been impressive but I still think March data will be decisively slower. The Rasmussen daily consumer confidence is down nearly 10 points from mid-Feb and the impact of the sequester will start to show up in the next 2-3 weeks (CBO is forecasting 750K job looses this year from sequester implementation).

Indeed, given that the sequestration has barely begun, it’s tough to make any comments about its impact. What will come in the next few weeks will be key.

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