Most of the market is looking at Rita.
There is still significantly stronger growth in the U.S. relative to the rest of the world. That's been the dominant factor in terms of continued large trade deficits and that's not going to change much this year.
We do think you're going to see a drop off in consumer spending in coming months. Part of the reason is workers are experiencing pain in their take-home pay. You're still seeing other areas of the economy kicking in. These will offset some of the negatives from lower consumer spending.
This will get people thinking a little bit more about the inflation risks the Fed has been talking about.
The data are consistent with very gradual cooling in the housing market.
Inflation costs have been pretty moderate, but we are expecting wage pressure to kick in by the end of the year.
When you look at the details on the positive revision, it's a fairly robust figure. The consumer is continuing to drive a lot of the growth that we're expecting in the first quarter.
Traders were really preparing for the worst. I think the reading is very much a cause for relief.
Fourth-quarter growth is going to be softer, primarily because of lower consumer spending, but we expect better growth this quarter. A major part of it is the sharp drop in auto sales, and we wouldn't expect to see that again.
It is difficult to argue that there is a bubble on a national level since it more of a coastal story, such as California and Florida. There has also been a reduction in speculative buying.