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Permabullish And Permawrong Joe LaVorgna Forced To Cut Q2 GDP Forecast Again, From 2.7% To 2.3%
From the Deustche Bank voodoogist who just can't catch a break on any coin toss so far in 2011. Below are Joey La-Vorg's latest thoughts on the unfolding stagflation in the US:
We have trimmed our current quarter growth estimate further based on the most recent economic data which showed higher inflation in the current quarter as well as preliminary evidence that the soft patch is extending into June. The May consumer price index topped expectations in both the headline (+0.2% vs. +0.4% previously) and core (+0.3% vs. +0.2%). While CPI energy declined (-1.0% vs. +2.2%) for the first time since June 2009, the gains among the remaining categories were fairly broad-based. Food prices rose (+0.4% vs. +0.4%), thereby leading the year-on-year trend to accelerate to a postrecession high of 3.5%. Within the core, apparel prices rose sharply (+1.2% vs. +0.2%), as did lodging away from home (+2.9% vs. unch.) and vehicle prices (+1.0% vs. +0.8%). Owners’ equivalent rent and rent of primary residence both continued their steady run of +0.1% gains to date in 2011, in turn the respective year-on-year rates of change for these series are steadily reaccelerating (1.0% and 1.4%) following a brief negative spell in 2010. Core inflation is presently up 1.5% year-on-year, and we expect it to further accelerate through yearend (2.1%). The larger-than-expected increase in the CPI implies the inflation adjustment to current quarter consumption will be larger than we initially anticipated, thereby softening the profile of household spending in real terms. Furthermore, we expect June to be another dismal month for auto sales. As a result, we lowered our Q2 PCE estimate to 1.0% from 2.0%, which in turn lowers Q2 GDP to 2.3% from 2.7%.
As we wrote previously, this week’s data are particularly useful in terms of getting an early read on the tone of the economy in June. Specifically, we are watching the regional production surveys and jobless claims. Yesterday’s NY Empire survey was much softer than expected in both the headline and details. The headline dipped into negative territory (-7.8 vs. +11.9) for the first time since November; new orders (-3.6 vs. +17.2), shipments (-8.0 vs. +25.8) and lead times (-3.1 vs. +2.2) also fell below zero. Importantly, the 6-month outlook for the headline (22.5 vs. 52.7), new orders (15.3 vs. 47.3) and shipments (17.4 vs. 41.9) all deteriorated significantly. The results of the Empire survey were troubling, and if the Philly index corroborates this weakness our concerns for the near-term outlook will increase. Interestingly, the industrial production data for May presented a more robust outlook. Ex-auto manufacturing output was solid (+0.6% vs. -0.1%), although auto production continued to decline as a result of parts shortages (- 1.5% vs. -6.5%). While we softened the Q2 outlook in response to recent economic news, the factory sector data present a somewhat mixed picture—the Empire survey suggests the soft patch extended into June, while the IP data point to a factory sector that is performing well outside of the motor vehicle disruptions. As a result, near-term gauges of production, such as the Philly Fed index, Chicago PMI and even jobless claims will provide important (and timely) barometers of the depth and duration of the recent “soft patch.”
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Oh, now that's a shame.
In other news the unemployment rate has been downgraded from 9.3 to 9.2.
Who gives a fuck, it's all bullshit.
Real unemployment 25%+, who gives a shit?
22%
29%...wanna keep going?
Higher than that around here, I'm unemployed myself, how do you think I get to sit around and post on the internet all day?
Those employed are in stupid jobs. Rather follow the action on ZH.
I've noticed that, a lot of the higher paying jobs seem to be the actually least productive. More along the lines of charity cases so they can afford that underwater house and make the parents not feel like losers to their kids.
The higher the pay the less you are expected to make waves. Bottom line.
Meh, markets are "shrugging off" this irrelevant piece of news.
Thanks for reporting it though...some of us actually do care about the true state of the economy. Every day I read all the headlines here and realize that we are truly and deeply fucked. Too bad the traders, Fed, politicians, PDs, and banks don't give a fuck about the economy, only their bonuses/perks. Oh well.
They are "shooting the generals" this morning. Momentum favs are being sold while the ETFs are still up.
..but I'm sure it is yet another good sign about the great economy...you know, that thing that drives "upside earnings surprises."
The way they keep trimming this projected 24 oz T-bone, you wont get 1 bite when it arrives at your table, but you'll be told by the waitress it was excellent, far better than expected.
Big Joe deposits another 200k for a solid month's work and wonders how much he would get paid if he was actually right.
Professional liars are a real growth industry. It's what we are replacing our manufacturing base with. You have to have a security clearance nowadays to become one though, can't have a past history of truth telling.
You gotta love the focus on GDP, which is by now, what, about 28% financial industry "production" and luxury good consumption fueled by finance industry income. What a sickly farcical circle jerk.
Watch out Bob, lots of chicks here off South Main Street need that banker escort business to augment their streaming services to make ends meet. A gal I know at the unemployment office got reprimanded for suggesting they list job openings for escorts and dope dealers since those were the only growth sectors in the servicing area. The folks at the state capitol were not amused by this dose of reality therapy.
LOL. This is such crazy bullshit--reminds me of the Escher piece "Drawing Hands" . . . except for banksters and "market" minions it should be "Masturbating Hands."
http://www.worldofescher.com/gallery/A13.html
Beat that meat, boyz!
Because it's one, two, three strikes they're out at the old ball game. That's why the local chicks love bankers, unless they're all coked up that is .. five or ten minutes and they're all tucked in.
him just a lil guy
Lol, did anyone else catch Simon Hobbs just now?
"We have seen a BIG INCREASE in futures this mouuuning!!!!!!!......actually, we have deteriorated and now are headed for a lower open."
The tone of his voice went from "huge boner" to "I just saw my grandma's sagging tits" in about .5 seconds. Classic.
P is also indicated about 2% lower. Lulz.
ROFL
just a transitory soft patch on our way back to the green shoots.
i long for the days when analogies and metaphoric language had some
linkage with reality if there ever was such a time
Perhaps Joe ought to be tendering his resignation for FAILING as miserably as he has. Oh wait, I forgot. Like weathermen, financial 'professionals' doing God's work deal with no consequences when they are wrong - which is most of the time.
'Voodoogist'...took note of that one
Completely off the subject; it just occurred to me that the Fed blows, maintains, and then bursts bubbles for the lulz. Dec 13th, 2005 transcript of a FOMC meeting:
In Deutsche i'm sure the employees are required to sign some type of permabull paper. Trader's comments, most of the analysis etc is pure hype. Always glass full no matter what happends in the world. I would feel more sane standing on the border btween North and South Korea reading the propaganda slips they send each other than reading Deutsche's stuff.
Welcome to the "soft patch".....
http://youtu.be/DiUdtxe2YnU
The password is...soft patch.
"WASHINGTON (Reuters) - New claims for unemployment benefits fell last week, while housing starts and permits for future construction rose in May, signs that offered some hope the economy could soon pull out of its soft patch."
http://finance.yahoo.com/news/Data-points-to-some-rb-3169151641.html?x=0...
Must be a frustrated horticulturist who's marketing this "recovery". File next to "green shoots".
things could be worse..some one in congress might ask for claw backs on Tarp and such..think of the explosion in the financials if that got any ink.
Biggest DUMBASS SHILL ever on tv, after CRUDLOW, that is. Always revised his wrong calls to please the producers. A TOTAL ASSHOLE.
Biggest DUMBASS SHILL ever on tv, after CRUDLOW, that is. Always revised his wrong calls to please the producers. A TOTAL ASSHOLE.
"voodoogist"? I thought it was voodooologist.