The FOMC downgraded its March estimates for GDP growth of between 2.8 and 3.0 per cent to a range of 2.1 to 2.3 per cent at its June meeting, following the weather-related contraction. 

AllianceBernstein US economist and director Joseph Carson said there is broad evidence, however, that the rebound in growth will actually fall within the range of 3.0 to 3.5 per cent. 

Mr Carson said manufacturing production, for example, has been increasing at an annualised rate of six per cent in the second quarter excluding value-added output from the wholesale and retail distribution channels. 

“Indeed, adding to the gains in manufacturing output are the strong gains in rail and truck traffic, relatively strong retail sales and reports showing faster business sales,” Mr Carson said. 

“Altogether, these gains indicate that GDP goods output will post a large rebound in the second quarter.” 

Mr Carson said there has also been a 12 per cent non-annualised gain in the housing sector while recent surveys from McGraw-Hill, the FW Dodge Construction Index and the Architecture Billings Index show a strong rebound in non-residential construction activity. 

He said that while operating profits were down 10 per cent for the first quarter compared with the same period in the previous year, a rebound of equal scale in the second quarter is not out of the question. 

“Evidence of a solid rebound in second-quarter profits is limited at this time, but there are already relatively strong corporate estimated tax payments in June, along with solid earnings reports for FedEx and Adobe Systems as well as Intel raising revenue numbers for the second quarter,” said Mr Carson. 

“All of these indicators offer support to our bullish view.”