The Humiliation Continues: Days After Hiking Its Q2 GDP Forecast To 3.9%, Goldman Cuts It To 3.5%

Tyler Durden's picture

When it comes to the Goldman team of crack freaconopenguins the fun never ends.

It was just last Friday when we reported that "Humiliated On Its Q1 GDP Prediction, Goldman Doubles Down, Boosts Q2 Forecast To 3.9%."

The primary catalyst revealed by Goldman, which previously had a 3.0% Q1 GDP forecast before it cut it to -0.5%, was that "Consumer spending will probably grow strongly. Q1 consumer spending rose at a solid pace, but on fairly low quality composition. Higher utilities spending due to colder weather and Affordable Care Act-related healthcare spending accounted for the majority of growth. However, the trajectory of spending heading into Q2 was positive, as March core retail sales rose a strong 0.8% and we forecast a solid 0.5% gain in April based on data currently in hand." Oops. So much for the "positive trajectory" following today's abysmal retail sales report which actually saw the control group print negative!

Sure enough, moments ago Goldman just cut its just recently boosted Q2 GDP from 3.9% to 3.5% - the first of many such cuts.

BOTTOM LINE: April retail sales were a substantial disappointment, although upward revisions to March helped soften the surprise. Separately, import prices were lower than expected in April, reflecting declines in both food and energy prices. We reduced our Q2 GDP tracking estimate by four-tenths to 3.5%, and increased our Q1 past-quarter tracking estimate by two-tenths to -0.3%.


1. Retail sales rose 0.1% in April (vs. consensus +0.4%). Core retail sales edged down 0.1% (vs. consensus +0.5%), with notable declines in electronics (-2.3%), miscellaneous (-2.3%), and nonstore retailers (-0.9%). (Miscellaneous retailers include office supply and stationary stores, while the nonstore category mainly represents online sales.) Outside of the core, motor vehicle sales increased a bit (+0.6%) despite the decline in unit auto sales reported by dealers on the month. Gasoline station sales rose (+0.8%), likely due to higher selling prices, while building material sales increased 0.4% amid better weather. Although April retail sales were disappointing, headline retail sales in March were revised up four-tenths to 1.5% and core retail sales were revised up five-tenths to 1.3%.


2. Import prices fell 0.4% (vs. consensus +0.3%) in April. Food and beverage import prices fell 0.7% in April, and petroleum prices also fell 0.7%. Excluding food and fuels, import prices rose a modest 0.1% in April. Over the past year, import prices declined 0.3%, while ex-food and fuel import prices fell 1.0%, representing a net drag on core consumer price inflation.


3. Based on this morning's retail sales report, we reduced our Q2 GDP tracking estimate by four-tenths to 3.5%, and increased our Q1 past-quarter tracking estimate by two-tenths to -0.3%.

It would be pathetic if it wasn't so... never mind. It is absolutely pathetic. However, it would be excusable if at least Tom Stolper was making the reco. Sadly, we have to wait until he ends up at his next position before we fade him with the full faith and credit of epic idiocy.

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Devotional's picture

I am very worried of my future in the west, I really am. I have prepared as much as possible. Zero debt, gold, silver, savings and tech skills. This is all we can do, right? It better work.

Looney's picture

Douche bags? ;-)


cifo's picture

Forecasting is not a science. May not be even a discipline. Card readers do the same for a lot less money.

PlusTic's picture

get a gun, preferably auto or semi-auto at minimum...there will be rioting in the streets

CrashisOptimistic's picture

You do not deal with rioting in the streets by having a gun.

You deal with rioting in the streets by not being in the streets. 

GET OUT OF CITIES.  Learn to farm.

Smegley Wanxalot's picture

You forgot guns.  And ammo. 

Get those, or you are screwed.

Luckhasit's picture

Add a hangun, shotgun, and assault rifle with plenty of ammo then your bases are covered. 

JRobby's picture






Oxbo Rene's picture

I'm not allowed to have a gun ..........

JenkinsLane's picture

I'd recommend you read "The Modern Survival Manual: Surviving the Economic Collapse"

by Fernando Ferfal Aquirre, a man who lived through the economic troubles in Argentina

in the early 2000's.


It's the only book of it's nature I've read but it covers pretty much everything as far as I'm

concerned so I haven't bothered to read anything similar.


My top tip - If you are interested in buying folding knives only buy those made by Cold

Steel because a) they are reasonbly priced and, more importantly b) the lock is highly

unlikely to fail when you need it and slice your fingers off, unlike those of other

manufacturers. (I learnt this through bitter experience, spending a lot on Emerson,

Benchmade, Spyderco, Zero Tolerance, etc. before realising all their locks were shit.

IMO Emerson is a piece of crap only bought by "Special Forces use these knives"

suckers.) In addition, Cold Steel often sells models with 5" blades, which, if you read the

book, is an important consideration in my opinion.


If you live in Europe ex the Czech Repbublic, Italy or countryside areas of other

European countries folders are pretty much what you are limited to.

autofixer's picture

Cheerleading is hard. 

101 years and counting's picture

Q2 GDP will be 1.6%.  courtesy of soaring energy and food prices.  as actual output continues to fall and more people become unworking.

Dr. Engali's picture

Let me save all you squid muppets some unnecessary reading and expense.  1.5% is where we will be. 

youngman's picture

Its moving faster than the FX markets now..and that says something...

ptoemmes's picture

Get it over with...cut it to pi...that will keep them busy calcucating.

FieldingMellish's picture

3.9... 3.5...3.0...2.3...1.8...1.2...0.8...0.3... (at least its still positive, right?)... -0.3...

orangegeek's picture

3.9 adjusted to 3.5 adjusted ....blah blah blah....adjusted to -1.0%.  US hits GDP target - S&P up 5%!!!

Relentless101's picture

psssssttttt... They have no fucking clue...

SDShack's picture

My favorite line from the initial post last week is this one:

"Higher utilities spending due to colder weather and Affordable Care Act-related healthcare spending accounted for the majority of growth."

So increased cost to consumers, means higher spending, which means GROWTH?! So I guess all these double digit increases for food, energy and healthcare is what is going to allow the consumer to "spend more" for the essentials... but how that leaves any "discretionary" spending for retail is beyond me. The only way that happens is if the consumer can mortgage their house with a liar loan, or get a free car at 0% interest, or take out more credit cards to replace their currently maxed out ones. Or go on disability, food stamps, welfare, etc. It's 0bamanomics = Economics + Moronics.

JRobby's picture

Fast forward to August 2014: 2nd Q 2014 GDP adjusted to 0.35%

oklaboy's picture

and the quegie board sez....... -5.0