Key highlights:

• Solid GDP growth to end 2022, but domestic final demand growth was weak.
• January employment report very strong with a large bounce in non-farm employment. January services ISM also bounced back from its December fall; but other surveys still weak.
• We now expect, in addition to a March 25bp hike, that the Fed will also lift rates in May before pausing at a target range of 5.00-5.25%. We have also shifted out the timing of when we expect the Fed to start cutting rates from 2023 Q3 to Q4.

Find out more in NAB’s US Economic Update (February 2023)