Incapacitated Increase

While the first estimate of 23Q1 GDP is a pleasant 2%, do not be deceived. First, growth is clearly decelerating from 3.2% in 22Q3 to 2.6% in 22Q4. Moreover, the monthly data suggests that economic growth was very strong in January, essentially flat in February and was negative in March. As a result, we head into 23Q2 with negative momentum, a rate hike on the horizon, and reduced bank lending.