We got an interesting research note yesterday from Deutsche Bank’s already bullish economics team.From Chief U.S. Economist Joe Lavorgna:
We estimate that the economy expanded by +2.8% in Q1, but would not be surprised if growth tops 3% because of upside risks to consumption, namely from services and government spending. Our analysis suggests that defence spending in the last quarter may be greater than what we currently forecast. Inventory investment, which is always the biggest wildcard in forecasting GDP, is expected to increase $65 billion compared to a $52 billion increase in the previous quarter. Importantly, the projected inventory build is not particularly large and does not necessarily imply payback in the current quarter.
Economists are currently looking for 2.5 per cent growth.
The Bureau of Economic Analysis will release the GDP report at 8:30 AM today.
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