Why I just changed my tune on economy: Welch

The U.S. economy is feeling much better in recent weeks with businesses benefiting from strength in the auto and housing markets, former GE chief executive and management expert Jack Welch said Wednesday.

"We know the consumer has more money now, whether it's gas prices or a little better employment levels," said Welch. "You're getting strength in autos. You're getting some real strength in housing. The housing thing spills off to so many different businesses."

In his capacity as a senior advisor to the private equity group Clayton Dubilier & Rice, Welch said he just finished two days of reviewing businesses and "things are looking up."

Clayton's lawn care and landscaping firms are getting a bump on stronger housing, while industrial companies are "living off a stronger auto book," he told CNBC's "Squawk Box."

"There's clearly a pocket of change, particularly in the last couple of weeks in February and the first couple of weeks in March. It's that recent. It feels a lot better. There's no question about it," Welch said.

Welch said he was "feeling a little shaky" about the economy when he last appeared on "Squawk Box" on Dec. 16, hours before the Federal Reserve raised interest rates for the first time in more than nine years.

"I wouldn't have bet on a 2 percent first quarter [gross domestic product] in December. Today I'd pretty much bet on a 2 percent first quarter."

The Fed holds its March policy meeting next week, but few market participants expect another rate hike this time.

Welch agrees with the consensus. And despite misgivings about whether the Fed should act, he predicted a possible move in April or June. "I would prefer they don't [hike] because they're up against everybody else who's throwing [easy money] at it."

Many central banks around the world, including the European Central Bank, the Bank of Japan, and the People's Bank of China, have been easing their monetary policies.

When the Fed raised rates in December, policymakers predicted four more hikes in 2016. But the financial turmoil at the start of the year had scaled back those expectations among traders.

But recent strength in stocks and oil, which both set recent bottoms on Feb. 11, has been bringing back thoughts of a more aggressive path higher for rates.

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