Goldman Boosts Q2 GDP Forecast Due To Weaker Than Expected Q1 GDP

Tyler Durden's picture

Today is the day when economists weathermen everywhere jump the shark. Here's Goldman's Jan Hatzius.

BOTTOM LINE: Q1 GDP was revised lower than expected, mainly due to a larger drag from inventories. Initial jobless claims fell more than expected, while continuing claims declined to a new post-recession low. Because of weaker inventory investment in Q1, we increased our Q2 GDP tracking estimate by two-tenths to 3.9%.


Main Points:


GDP growth in Q1 was revised to -1.0% (vs. consensus -0.5%), from +0.1% initially reported. Almost all of the net revision was due to a larger drag from inventory investment, which contributed -1 percentage point (pp) to the revision. Inventory investment is now estimated to have reduced GDP growth by 1.6 pp in Q1. Net exports (-0.1pp) and government (-0.1pp) also subtracted, although business fixed investment (+0.1pp) and personal consumption expenditures (+0.1pp) provided partial offsets. Real final sales—GDP excluding inventory investment—was revised down only one-tenth to +0.6%. Real gross domestic income (GDI) for Q1—first reported in today's report—fell 2.3%, the worst performance since the recession. The core PCE price index rose at a 1.2% annualized rate in Q1, one-tenth lower than initially reported.


Because of weaker inventory investment in Q1, we increased our Q2 GDP tracking estimate by two-tenths to 3.9%.

Why are you still reading? You should be BTFATH - after all corporations have billions more in stocks to buyback!

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maneco's picture

What a muppet! I'm waiting for the downward revisions.

Headbanger's picture

Why not Q2 GDP +8.9%??


What a bunch of economic leaches! 

This "market" has become a retarded game of chicken now.

The Wall Street banksters are all waiting for the other guy to blink so they'll bail out too.

And when that happens, the charade implodes!


Tjeff1's picture

game of chicken?  More like hot potatoe , or musical chairs

smlbizman's picture

once again i ask, whom are they fucking selling this bullshit to?

WhyDoesItHurtWhen iPee's picture

The Moar they cook the numbers, the Moar desperate the excussess get, as to sound infantile and Moar not-give-a-fuck.

NoDebt's picture

I think you nailed it- desperation.  "It HAS to be up because it was down last quarter.  And if it's not, we'll force it to be."

Tabarnaque's picture

Stuff the algos bitchezzz, the S&P must go up to infinity and beyond!

JJdog's picture

why would anyone even gives a crap about this Jan Asszius? seriously, everything he said was wrong.  And now he is delusional talking nonsense 

Sudden Debt's picture

well, in Europe at least Q2 is going down te trash fast.

madcows's picture

great logic.  Q1 sucked, so Q2 will be great.  All that pent up demand.

Cocomaan's picture

Right now the weather in the West is fucking horrible. Droughts are destroying agriculture and many other industries. I don't see the amatuer economists-made-meterologists saying shit about that.

SpanishInquisition's picture

Because of weaker than expected rain in Q1, the economists are upwardly revising their projections for rain in Q2

replaceme's picture

Full Retard.  Ask Sean Penn how that worked out for him.

WmMcK's picture

Never do that -stop at:

Rain Man = idiot-savant

shermacman's picture

Present Øbama is going to be so angry when he reads how bad this past winter was.

orangegeek's picture

GDP - Goldman Domestic Product


Designed by assholes.  Issued by assholes.



Quinvarius's picture

And rammed up the public's assholes.

valley chick's picture

All that is left is their hot air to talk this thing they call a market up.  Of course manipulation and massive printing included. Keep stacking!

q99x2's picture

Send Jan Haitus to Thailand and have him try to bribe a few officials there.

Last of the Middle Class's picture

due to drag from inventories means they're still trying to sell all the christmas shit they over ordered. Good luck China american consumer is tapped out and bath house barry doesn't have a clue. Not that he's weak or anything you know. Revise up the revise down, never let them see what the other hand is doing. God I love this country and we have such incredibly inept people running it.

Tjeff1's picture

Why don't they just make a strategic PCE "adjustment" down to 0%? Voila back to growth.

JRobby's picture

No Income No Demand

youngman's picture

The retailers are showing slower sales...are they going to increase their inventories..doubt it...same thing with CAT and John Deere..are they going to build a bunch of new tractors...or hold back a bit....

Bernoulli's picture

Diggers and excavators will definitely be necessary soon...

SDShack's picture

"The scoops are on the way.... The scoops are on the way!"

NoIdea's picture

With the drought and all the hot weather coming up ice cream sales are set to explode. Surely they will be strong enough to boost GDP?

WmMcK's picture

Long boating accidents - wait a minute, is that cause or correlation?

pragmatic hobo's picture

i think it's an insult to compare weathermen to economists ... weathermen are trained in non-linear syetems and are fairly good at what they do.

tuttisaluti's picture

similar down here in antigua. if the sale in a shop goes back 50%, then they just double the prices.

bagehot99's picture

So if Q2 and Q3 disappoint, GS will up Q4 yoy GDP projection to 26.2%?


This isn't economic forecasting. This is the club feeding the provincials a bullshit sandwich.

Bernoulli's picture

GS has to feed algos with fudged numbers that add up for a total year growth prediction. As soon as their algos could "calculate" a contraction for 2014 out of their official forecasts, I guess they would automatically go into SELL mode all at once.

But honestly: already after Q2 contraction, the shit will hit the fan. Therefore: giga-crash (as opposed to giga-factory) will happen at latest around September 2014. At latest. Maybe already next week.

Looking forward to it. That's when I will start "consuming" mass media again and enjoying ridiculous explanations for the reasons and stuff. Over beer and popcorn.

BeerMe's picture

If you are in a business that relys on everyone but the richest you know it will never happen.  June would have to be one of the best months on record.

cowdiddly's picture

I guess those plunging bond yields are predicting the economy will soon be sitting on the great rock candy mountain with rivers of ice cream and little fairies flitting about the place

Quinvarius's picture

Justin Bieber needs to release an album so we can add his intellectual property to the GDP.  We have gone too far.  Only Bieber can save us now.

Smegley Wanxalot's picture

He's gotta be right because the local GM dealerships have zero vehicles in inventory.

Chuck Knoblauch's picture

Goldman's double-down on a sure losing bet.

No consequences if Goldman loses, right?

Puncher75's picture

Who are the retards that are buying this nonsense?

ejmoosa's picture

And I expect to lose three pounds since I gained two last week....

Notsobadwlad's picture

Goldman is like a 50 year old cheerleader. They know the cheers, but no one is really that interested in the show.

Goldman has strained its public credibility well past the breaking point. But what else can it do to protect the theft going on behing the veil.