It was only a matter of time before Wall Street, overoptimistically hockeysticking everything as always, slammed its wrong Q2 GDP forecasts following the earlier miss in Wholesale Inventories, which printed at -0.5% on expectations of a +0.3% increase, and down from a downward revised -0.1% (was +0.2%). That time has arrived, with Barclays the first to slash its already stall speed 1.0% Q2 GDP forecast by a whopping 40% to 0.4%. Looking forward to the imminent revisions from Goldman and, of course, Joe "Almost as good as Groundhog Phil, almost" Lavorgna.
US Q2 GDP tracking: Down four-tenths to 0.6% on decline in wholesale inventories
Wholesale inventories declined by 0.5% m/m in May, significantly weaker than our forecast (+0.2%) and the consensus (+0.3%). In addition, growth in April was revised down to -0.1% from +0.2%. This subtracted 0.4pp from our Q2 GDP tracking estimate, which now stands at just 0.6% q/q (saar).
And here is Goldman:
1. Wholesale inventories declined 0.5% in May (vs consensus +0.3%). Inventory growth in April was revised down three-tenths to -0.1%. By category, auto inventories?which had made solid positive contributions to inventory growth in recent months?were flat, while machinery declined 0.7% and nondurable goods fell 0.8%. The wholesale inventory-to-sales ratio declined to 1.18, its lowest level over the past year.
2. In light of slower-than-expected May inventory accumulation and the downward revision to April, we reduced our Q2 GDP tracking by three tenths to 1.3%.