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Goldman Lowers Q1 GDP Forecast To 2.7% Due To Inventory Impact

Tyler Durden's picture


Earlier today we summarized the Q4 GDP print and said it would be virtually impossible for the economy to carry over a comparable annualized growth rate into 2014. Moments ago Goldman agreed, when it cut its Q1 GDP forecast by 30 bps to 2.7%.

From Jan Hatzius:

BOTTOM LINE: Q4 GDP grew in line with expectations, although the composition was slightly softer than expected. We start our Q1 GDP tracking estimate three-tenths below our prior assumption at 2.7%.




Real GDP increased at a 3.2% rate in Q4 (vs. consensus 3.2%). Personal consumption expenditures rose a smaller-than-expected 3.3% (vs. consensus 3.7%), which was still the fastest rate since 2010. Business fixed investment rose 3.8%, held down by a 1.2% decline in structures investment following two quarters of strong gains. Equipment investment rose a solid 6.9%. Business inventories added four-tenths to headline growth. Residential investment declined 9.8%, reflecting in part the lagged impact of weaker housing starts in past quarters. Net exports were also a strong positive contributor, adding 1.3 percentage points to growth. Federal government spending fell 12.6%, pushing total government spending down 4.9%. The Commerce Department estimated that the federal government shutdown subtracted three-tenths from GDP growth. Although the composition of this morning's report was slightly softer than expected, solid 2.9% growth in real final sales to private domestic purchasers suggests positive underlying momentum heading into 2014.


We start our Q1 GDP tracking estimate three-tenths below our prior assumption at 2.7%, due to the larger-than-expected inventory contribution in Q4.

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Thu, 01/30/2014 - 10:47 | 4383954 The_Ungrateful_Yid
The_Ungrateful_Yid's picture

News and charts no longer matter, what matters is keeping the illusion alive.

Thu, 01/30/2014 - 10:48 | 4383959 kodachrome
kodachrome's picture

And Bitcoin.

Thu, 01/30/2014 - 11:34 | 4384125 WarriorClass
WarriorClass's picture

Yet somehow the existing inventory of empty houses doesn't decrease the price of housing?


Thu, 01/30/2014 - 11:11 | 4384031 The Vineyard
The Vineyard's picture

Yesterday, I asked my mother if there was any hope.  She hit me in the face with a fish.  What a pisser.

Thu, 01/30/2014 - 10:48 | 4383964 buzzsaw99
buzzsaw99's picture

inventory impact my ass. there is no market, there is only the fed.

Thu, 01/30/2014 - 14:08 | 4384559 SDShack
SDShack's picture

And Govt.... "shutdown subtracted three-tenths from GDP growth." Love how Govt growth contributes to GDP growth in the world of Bureau of Lies & Statistics.

Thu, 01/30/2014 - 10:56 | 4383972 Rainman
Rainman's picture

Squid musta missed the memo about the ' new and improved ' GDP intellectual property calculations. They slippin !

Thu, 01/30/2014 - 10:53 | 4383979 Colonel Klink
Colonel Klink's picture

Let the downward revisions begin!!!

Thu, 01/30/2014 - 10:55 | 4383982 Sudden Debt
Sudden Debt's picture


see? where that school used to be... that crater?...

Thu, 01/30/2014 - 10:54 | 4383984 ziggy59
ziggy59's picture

Zandi disagrees..The economy is only going to get stronger: Mark Zandi


Assclowns ( analysts, banksters, and politicians) keep their jobs just like weathermen when blatantly wrong

Thu, 01/30/2014 - 10:58 | 4383996 buzzsaw99
buzzsaw99's picture

zandi is what he is, a broken record, but predictable in being a broken record. rah rah housing bitchez.

Thu, 01/30/2014 - 10:55 | 4383987 Dr. Engali
Dr. Engali's picture

GDP will come in wherever TPTB wants it to come in. Everything else is just noise.

Thu, 01/30/2014 - 11:01 | 4383999 Fiat Burner
Fiat Burner's picture

Off topic: But why doesn't ZH put some market tickers on the home page or something? I'm tired of having to go to sites like Marketwatch and having to see all the bullshit propoganda. I don't want to support them by giving them clicks.  Can anyone recommend a better site for viewing market price action?

Thu, 01/30/2014 - 11:06 | 4384016 The_Ungrateful_Yid
The_Ungrateful_Yid's picture

I use Yahoo finance portfolio. Works good for me.

Thu, 01/30/2014 - 11:08 | 4384023 madbraz
madbraz's picture

Is Goldman looking at January retail sales forecasts, even their own retail sales index forecast, which shows YOY growth for the 4 weeks of January of 1.7%, 1.3%, 0.9% and 2.2%.  


1.5% growth at best for Q1.  Need to fudge quite a bit to get to 2%

Thu, 01/30/2014 - 14:10 | 4384569 SDShack
SDShack's picture

Never underestimate the Fed, or the Bureau of Lies & Statistics.

Thu, 01/30/2014 - 11:28 | 4384106 Rising Sun
Rising Sun's picture

Everything is growing!!!!  Like your fucking nose GS!!!!


The economy is fucked and you shitbags at GS know it.


Keep spinning that wheel GS and when it stops at zero, you've got the right answer you fucking assholes!!!!!

Thu, 01/30/2014 - 11:49 | 4384173 Yen Cross
Yen Cross's picture

    It looks like the markets are already front running the March untaper. It won't be long and bad news is good news will be priced 6 months out! What a wasteland these markets are.

Thu, 01/30/2014 - 12:18 | 4384251 notadouche
notadouche's picture

Just recalculate the GDP so it shows what it is supposed to show.  Not setting any precedents here.

Thu, 01/30/2014 - 12:23 | 4384262 thefirstabomb
thefirstabomb's picture

It's all just wishful thinking from people who have drunk their own Kool-Aid long enough to actually believe what they are preaching


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