Goldman Slashes Q4 2013, Q1 2014 GDP Estimates, Expects Only 1.9% Growth In Current Quarter

Tyler Durden's picture


It was only two weeks ago when Goldman's Jan Hatzius, as we predicted he would, took a hammer to its GDP forecasts for Q1 GDP upon the shocking realization that Q4 "growth" was all inventory driven. This morning, the hammering resumes as Goldman, in the aftermath of today's disastrous retail sales, not only cut its Q4 2013 GDP forecast from 2.8% to 2.4% (vs the 3.2% initially reported), but slashed its current quarter estimate from 2.3% to 1.9%. As a reminder, this number was 3.0% three weeks ago. Once again, nothing beats an economist forecast to know what the future will not be.

From Jan Hatzius:

BOTTOM LINE: The January retail sales report was a significant disappointment, compounded by negative back revisions. Adverse weather was likely a substantial contributor to the weaker January figures. Separately, jobless claims were roughly in line with expectations. We reduced our Q1 GDP tracking estimate by four-tenths to 1.9%.


Headline retail sales unexpectedly declined 0.4% in January (vs. consensus Flat). Core sales?which the Commerce Department uses to estimate the personal consumption expenditures component of GDP?declined 0.3% (vs. consensus +0.2%). The composition of sales across categories was consistent with a negative weather impact, with weakness at department stores (-1.5%), sporting goods stores (-1.4%), and restaurants and bars (-0.6%). However, non-weather sensitive categories, such as non-store retailers?mainly online sales?also showed weakness, down 0.6% on the month. In addition to disappointing core sales growth in January, December growth was revised down four-tenths to 0.3%. Outside of core retail sales, auto sales fell 2.1%?consistent with disappointing unit auto sales reported by dealers?while building materials rose 1.4% and gasoline station sales increased 1.1%.


Initial claims for jobless benefits stood at 339k in the week ended February 8 (vs. consensus 330k), an increase from the prior week's 331k. Continuing claims fell slightly to 2,953k in the week ended February 1 (vs. consensus 2,964k), from an upwardly-revised 2,971k in the previous week. As we noted recently, we view the rise in continuing claims over the last month as mostly artificial.


We reduced our Q1 current-quarter GDP tracking estimate by four-tenths to 1.9%. We also reduced our Q4 past-quarter estimate by four-tenths to 2.4% (vs. 3.2% initially reported).

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Thu, 02/13/2014 - 10:46 | 4432043 B2u
B2u's picture

Oooops !!!

Thu, 02/13/2014 - 11:24 | 4432196 kliguy38
kliguy38's picture

He doesn't give a shit ....he did his job and suckered in a few more sheep for the slaughter as the "boyz" continue their distribution........enjoy pleebs

Thu, 02/13/2014 - 11:45 | 4432292 robertsgt40
robertsgt40's picture

"...we view the rise in continuing claims over the last month as mostly artificial."?  Really?  Care to clarify?

Thu, 02/13/2014 - 14:43 | 4433136 Offthebeach
Offthebeach's picture

It's not easy being Squid economist.   The little people, disappointing wining children that they are,  have been getting odd, almost uppity lately, and all in spite of us doing God's work.

It might be time for a good old dictator to be elected.  Clean things up....


GS think off/

Thu, 02/13/2014 - 10:48 | 4432046 SheepDog-One
SheepDog-One's picture

I guess GS needs to hammer down GDP a bit so they can once again 'good news' raise it next Q.

Thu, 02/13/2014 - 10:49 | 4432051 Dr. Engali
Dr. Engali's picture

Why is weather a factor in retail sales but it's not a factor in weekly jobless claims? Are you trying to tell me that more people braved the snow to go out and sign up for their checks that they won't be spending because it's too cold to go to the store?

Thu, 02/13/2014 - 10:51 | 4432061 BandGap
BandGap's picture

Uh, you can apply for unemployment online. You can confirm over the phone too, perhaps  on one the free phones handed out by Mr. Soetoro.

Of course, you can shop online too. But thinking that way just confuses a person.


Thu, 02/13/2014 - 10:53 | 4432067 Johnny Cocknballs
Johnny Cocknballs's picture

Free money is a helluva drug.

And you don't need another pair of shoes. Jesus you just bought 2 pairs lastv week!


So don't wear that dress to it then!!


How does saving 15% on superfluous footwear save me money?  Goddamnit, I'm going out for a pack of cigarettes...

Thu, 02/13/2014 - 10:50 | 4432052 Johnny Cocknballs
Johnny Cocknballs's picture

An economist is an expert who can tell you tomorrow...

Thu, 02/13/2014 - 10:51 | 4432056 starman
starman's picture

Any of you realize that the  weather man always  gets paid for being right only 50% of the time?

Thu, 02/13/2014 - 10:50 | 4432059 unrulian
unrulian's picture

Taper the Taper Bitch

Thu, 02/13/2014 - 10:54 | 4432073 Johnny Cocknballs
Johnny Cocknballs's picture

Tapering Uncle Ben's taper?

That's a paddlin'.

Thu, 02/13/2014 - 10:51 | 4432062 tallen
tallen's picture

Waiting for the news, so I can hear them all proclaim it's above estimates and great news for the economy.

Thu, 02/13/2014 - 10:53 | 4432068 Sudden Debt
Sudden Debt's picture

I wonder what they expect from Q1 2012.... can't they raise that a bit? Should rally the markets a bit...

Thu, 02/13/2014 - 10:54 | 4432072 LawsofPhysics
LawsofPhysics's picture

Can anyone comment on the huge reverse repos that have been happening?  My take is that another primary dealer will be sacrificed on the alter of fiat money soon.  Anybody else have some information/insight on this?  Could be another good set of shorts...

Thu, 02/13/2014 - 10:55 | 4432077 gwar5
gwar5's picture

Real GDP growth has been negative 2-3%/ year since about 2006 according to shadowstats.


This means we're already in a Depression and the other big shoe has not even dropped. All the statistics and projections of GS and are meaningless Polly-Anna projections. They are worse than nothing because they mislead and cause more dislocations.


Thu, 02/13/2014 - 11:41 | 4432279 ncdirtdigger
ncdirtdigger's picture

The RoI of money printing just isn't what it used to be.

Thu, 02/13/2014 - 11:03 | 4432106 bubblemania
bubblemania's picture


Thu, 02/13/2014 - 11:06 | 4432118 Spastica Rex
Spastica Rex's picture

What we really need is a way to go back through the predictions that Goldman et al make, revise them to reflect a beat of the predictions, and then re-publish them.

Thu, 02/13/2014 - 11:12 | 4432149 Handful of Dust
Handful of Dust's picture

Most consumers are tapped out. The private sector has collapsed as copiously reported on ZH and even MSM.

Who is left to spend? It's a smaller group.

Thu, 02/13/2014 - 11:15 | 4432154 Rising Sun
Rising Sun's picture

fuck GDP - we have food stamps, free phones and Barry-care




PS:  Fuck you Nancy Pelosi - you rotten cunt!!!

Thu, 02/13/2014 - 11:23 | 4432202 Everybodys All ...
Everybodys All American's picture

and do not forget the PPT to backstop every down swing.

Thu, 02/13/2014 - 11:19 | 4432174 Iam Yue2
Iam Yue2's picture

For a man with a Doctor of Philosophy in economics from the University of Oxford, Jan Hatzius, Chief Economist at Goldman, seems incapable of making up his mind. How long before we hear that he is leaving to join Stolper?

Thu, 02/13/2014 - 11:45 | 4432291 ncdirtdigger
ncdirtdigger's picture

If I were him, I'd hold a garage sale and make sure I got rid of any nail guns laying about.

Thu, 02/13/2014 - 11:26 | 4432210 Son of Captain Nemo
Son of Captain Nemo's picture

From the bearded "pie hole" of Lord Blankfein. 

Made in America Baby!

Thu, 02/13/2014 - 11:28 | 4432213 Kaiser Sousa
Kaiser Sousa's picture

(Reuters) - The U.S. Senate Banking Committee said on Wednesday that it postponed Thursday's hearing with Federal Reserve Chair Janet Yellen.

The Washington area is expecting a significant snowstorm that could conflict with Yellen's testimony.

The committee said the hearing, in which Yellen is due to deliver the semi-annual monetary policy report to Congress, would be rescheduled for a yet-to-be-determined date.

Thu, 02/13/2014 - 11:35 | 4432244 Its All Good
Its All Good's picture

"...nothing beats an economist forecast to know what the future will not be."



Thu, 02/13/2014 - 11:45 | 4432290 syntaxterror
syntaxterror's picture

But since their eCONomists are predicting 1.9%, won't the real number turn out to be 5%?

Thu, 02/13/2014 - 11:48 | 4432304 Iam Yue2
Iam Yue2's picture




"Jan Hatzius (born December 17, 1968) is the chief economist of investment bank Goldman Sachs. Notable for his bearish forecasts prior to theFinancial crisis of 2007–2008, he is a two-time winner of the Lawrence R. Klein Award for the most accurate US economic forecast over the prior four years.[1][2] He has also won a number of other forecasting awards, including the Wall Street JournalBloomberg, and Institutional Investor annual forecaster rankings."

Thu, 02/13/2014 - 11:48 | 4432310 ziggy59
ziggy59's picture

Its only Thursday..

Thu, 02/13/2014 - 11:49 | 4432317 zaphod42
zaphod42's picture

Well, what should we expect?

I am reminded of "Slick Willie" asking, "What do you mean by, 'Is'?"

What, exactly, was it you meant when you said, "growth?"


Thu, 02/13/2014 - 12:14 | 4432399 TheRideNeverEnds
TheRideNeverEnds's picture

Meanwhile stocks are going straight up to new higher highs, not a single downtick all day; have rallied 100 points on the S&P in the past week. 

Thu, 02/13/2014 - 12:33 | 4432520 Sufiy
Sufiy's picture

Gold Breakout: Yellen Pledges Continuity; Rickards Says Prepare For A 'Taper Pause' In June

 Jim Rickards was spot on the money with his last call on Gold just before its breakout of the $1270 level. Now he is calling again for the Taper Pause in June. Today Gold is knocking on $1,300 with the highest print of $1,299 so far and shorts in the Gold market can experience the Blood Friday tomorrow if Gold can manage to close above this psychological level.   The real driver is the unprecedented demand of 2,181 tons of Gold from China in 2013:

Thu, 02/13/2014 - 16:25 | 4433588 redd_green
redd_green's picture

WHAT is growing by 2% a quarter. Not GDP.  Real GDP has been dropping like a stone thanks to the folks who really run teh world de-industrializing the USA over the past 30 years.     What is growing by 2% a quarter?  Inflation, that's it.   Noting else. 

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