A steady run of softer-then-expected US data so far during Q1 suggest that US GDP growth is set to slow to around 1.2% (saar) over the quarter compared to 2.2% in Q4. However, the extent to which this reflects the temporary effects of poor weather over the first two months of the year, or more enduring factors, remains uncertain. For example, Tuesday’s retail US retail sales rose in March after falling in each of the previous three months. However the 0.9% print was less than the 1.1% pickup anticipated by the market on the grounds of the milder March weather being greeted by a sharp bout of pent-up spending. With the March FOMC minutes revealing that some members favoured a June hike in the policy rate, today’s slew of Committee speakers, who have previously expressed a range of views, should shed some light on how the Fed has interpreted the recent data. Today also sees US releases on initial jobless claims (we 11/04) (1230 GMT), building permits (1230 GMT) and housing starts (1230 GMT) (both March), as well as the recently very volatile Philadelphia Fed business outlook survey (April) (1400 GMT). According to Lloyds Bank, housing starts, which are more likely to be affected by weather considerations than permits, fell sharply in February to 897k, the lowest level since January last year. Starts are expected to rebound to 1009k which is slightly below the consensus view. Permits, which rose by 42k in February, are also expected to register an increase.
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