McRocket
Gold Member
- Apr 4, 2018
- 5,031
- 707
- 275
- Banned
- #1
'While the market was delighted on Thursday to see a delayed Q4 GDP print of 2.6%, which came in well above the expected 2.2% consensus number, we warned that "while Q4 was clearly a stronger than expected print, the real question is what happens in Q1, when most banks and nowcasts expect GDP to print below 1%, in some cases concerningly so."
Moments ago we got confirmation of precisely this, when following the latest dismal economic data including a 2 year low in the manufacturing ISM, a miss in UMich Consumer Sentiment, and a near record plunge in personal spending, Goldman launched its Q1 GDP tracking estimate at a paltry +0.9%. This forecast, as Goldman's chief economist Hatzius said, "reflects an expected drag from inventories, sequentially slower consumption growth, a decline in residential investment, and a four-tenths drag from the government shutdown."
It wasn't just Goldman, because at roughly the same time, the NY Fed's GDP Nowcast, which was launched to counter the Atlanta Fed's famous GDP tracker, crumbled from 1.22% last week (and 2.17% as recently as a month ago), to a stunning 0.88%, as a result of big declines in Personal Consumption, Housing Starts, Wholesale Inventories, and others.'
And speaking of the Atlanta Fed, it also just released its latest Q1 GDP nowcast, and it's a doozy, with the initial estimate coming just barely positive at only 0.3%, to wit:
GDP Crash: Goldman, Atlanta & NY Feds See Q1 GDP Tumble Below 1%
Nowcasting Report - FEDERAL RESERVE BANK of NEW YORK
GDPNow - Federal Reserve Bank of Atlanta
I have personally never seen the GDPNow that low in it's 7+ year history.
Early days...but UGLY so far.
Moments ago we got confirmation of precisely this, when following the latest dismal economic data including a 2 year low in the manufacturing ISM, a miss in UMich Consumer Sentiment, and a near record plunge in personal spending, Goldman launched its Q1 GDP tracking estimate at a paltry +0.9%. This forecast, as Goldman's chief economist Hatzius said, "reflects an expected drag from inventories, sequentially slower consumption growth, a decline in residential investment, and a four-tenths drag from the government shutdown."
It wasn't just Goldman, because at roughly the same time, the NY Fed's GDP Nowcast, which was launched to counter the Atlanta Fed's famous GDP tracker, crumbled from 1.22% last week (and 2.17% as recently as a month ago), to a stunning 0.88%, as a result of big declines in Personal Consumption, Housing Starts, Wholesale Inventories, and others.'
And speaking of the Atlanta Fed, it also just released its latest Q1 GDP nowcast, and it's a doozy, with the initial estimate coming just barely positive at only 0.3%, to wit:
GDP Crash: Goldman, Atlanta & NY Feds See Q1 GDP Tumble Below 1%
Nowcasting Report - FEDERAL RESERVE BANK of NEW YORK
GDPNow - Federal Reserve Bank of Atlanta
I have personally never seen the GDPNow that low in it's 7+ year history.
Early days...but UGLY so far.