J.P. Morgan Chase & Co. (NYSE: JPM) has raised its target for first quarter GDP growth to 2.3%. The move should have been expected, and will almost certainly be followed by other increased targets from banks and economists. Unemployment has dropped quickly enough and consumer and business spending have risen far enough that the current quarter should shape up to be among the best, if not the best, since the start of the recession. While government budget cuts may hurt growth, their bite will be felt in the second quarter at the earliest.
The Dow Jones Newswires note:
J.P. Morgan has revised higher its forecast for U.S. economic growth following stronger-than-expected retail sales in February.
The bank now expects annualised first-quarter U.S. gross domestic product to grow 2.3%, compared with an earlier forecast of 1.5%.
U.S. retail and food-service sales increased 1.1% in February, nearly double the figure expected by economists–a sign consumers are gaining confidence and spending more despite higher taxes and gasoline prices.
It was the fourth straight monthly gain and the biggest rise since September.
J.P. Morgan said in a note to clients that the retail-sales report implied consumer spending would rise at close to an annualised 2% pace in the first quarter of 2013
Filed under: 24/7 Wall St. Wire, Economy Tagged: JPM