DEUTSCHE BANK: The Consumer Has Ignored The Tax Hike, And It Looks Like It's Time To Crank Up GDP Forecasts

Deutsche Bank's Joe LaVorgna takes stock of today's strong retail sales report.

While the retail sales gains are impressive, it is even more so in light of the rise in gas prices, increase in taxes, delayed tax refunds and widespread inclement weather in February. The retail sales data point to consumers' resilience, and as a result we are marking up our Q1 forecast for consumer spending from 1.5% to 2.5%. This will significantly lift GDP growth in the quarter, but we are waiting to see the business inventory data later this morning before we officially revise our forecast.