DEUTSCHE BANK: This Time It's Different—You Don't Have To Worry About A Slowdown

Investors worrying about a significant pullback in economic growth this quarter are sorely mistaken, Deutsche Bank analysts wrote in a note published earlier this week.

As we pointed out yesterday, analysts thinking equities markets are just repeating the same bearish Q2 pattern we saw in 2011 and 2012 have a point:

Click for larger image.

chart of the day, s&p 500 ytd returns for selected years, april 2012

But according to DB’s Markets Research team, this time really is different:

In each of the last two years, the labour market weakened in early Q2 and did not recover until around Q4. Investors are worried a similar profile may emerge again this year. However, as we enter the current quarter, there is one substantial difference between this year and the last two years, and that is initial jobless claims are much lower at present than where they were at similar points in both 2010 and 2011. Provided that claims continue to remain near their recent readings, if not decline further, we expect underlying payroll gains on average to come in well above 200k per month. In the process, worries about a meaningful slowdown in economic activity should subside.

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