The earthquake, which registered 8.9 on the Richter scale, is the largest to hit Japan in at least 140 years, although the overall ramifications are still very much uncertain and will depend critically on any tsunami-related damages in the Pacific Basin.
Yesterday in St. Thomas, Ontario, and the end of my economic outlook presentation, I said that while we have no idea what natural disasters might befall us, the U.S. and Canada are likely to straddle 3% growth this year and next.
While we were cautiously optimistic about the economic outlook at the turn of the year, we now believe the odds have increased for a self-sustaining expansion in North America through this year and next despite the recent surge in commodity prices.
State and local government budget worries are at the top of the news these days. Q4 GDP growth was revised down, in part, because of weakness in state and local government spending, which fell 2.4% as yawning deficits pinched budgets.