The most overrated economy in the world?
The latest data underscore a widening gap between expectations vs. reality in a much-touted U.S. economic recovery. The Bloomberg and Citibank economic surprise indices for the U.S. (the difference between consensus estimates and actual data) are at their lowest level since 2009, and today’s U.S. industrial production number didn’t fail to disappoint again. January was revised to -0.3 from +0.2, and February came in at +0.1 instead of the expected +0.2. That’s after three months of falling retail sales – not one of which was forecast by the consensus. The consensus thesis that falling oil prices are good for the U.S. economy (because they will boost consumer spending) is falling apart. The big question is how far reality will penetrate into tomorrow’s Federal Open Market Committee meeting.
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