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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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Thu, 05/29/2014 - 09:33 | 4805265 maneco
maneco's picture

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

Thu, 05/29/2014 - 09:42 | 4805289 Headbanger
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!


Thu, 05/29/2014 - 09:53 | 4805347 Tjeff1
Tjeff1's picture

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

Thu, 05/29/2014 - 13:27 | 4806294 smlbizman
smlbizman's picture

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

Thu, 05/29/2014 - 09:56 | 4805365 WhyDoesItHurtWh...
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.

Thu, 05/29/2014 - 10:36 | 4805523 NoDebt
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."

Thu, 05/29/2014 - 09:39 | 4805293 Tabarnaque
Tabarnaque's picture

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

Thu, 05/29/2014 - 09:35 | 4805271 JJdog
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 

Thu, 05/29/2014 - 09:36 | 4805281 Sudden Debt
Sudden Debt's picture

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

Thu, 05/29/2014 - 09:37 | 4805283 madcows
madcows's picture

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

Thu, 05/29/2014 - 09:44 | 4805315 Cocomaan
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.

Thu, 05/29/2014 - 10:02 | 4805401 SpanishInquisition
SpanishInquisition's picture

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

Thu, 05/29/2014 - 09:38 | 4805288 replaceme
replaceme's picture

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

Thu, 05/29/2014 - 11:13 | 4805687 WmMcK
WmMcK's picture

Never do that -stop at:

Rain Man = idiot-savant

Thu, 05/29/2014 - 09:40 | 4805298 shermacman
shermacman's picture

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

Thu, 05/29/2014 - 09:52 | 4805302 orangegeek
orangegeek's picture

GDP - Goldman Domestic Product


Designed by assholes.  Issued by assholes.



Thu, 05/29/2014 - 10:46 | 4805569 Quinvarius
Quinvarius's picture

And rammed up the public's assholes.

Thu, 05/29/2014 - 09:43 | 4805309 valley chick
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!

Thu, 05/29/2014 - 09:43 | 4805313 q99x2
q99x2's picture

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

Thu, 05/29/2014 - 09:47 | 4805327 Last of the Mid...
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.

Thu, 05/29/2014 - 09:51 | 4805342 Tjeff1
Tjeff1's picture

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

Thu, 05/29/2014 - 09:54 | 4805354 JRobby
JRobby's picture

No Income No Demand

Thu, 05/29/2014 - 09:55 | 4805361 youngman
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....

Thu, 05/29/2014 - 10:41 | 4805548 Bernoulli
Bernoulli's picture

Diggers and excavators will definitely be necessary soon...

Thu, 05/29/2014 - 13:18 | 4806256 SDShack
SDShack's picture

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

Thu, 05/29/2014 - 10:07 | 4805416 NoIdea
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?

Thu, 05/29/2014 - 11:11 | 4805674 WmMcK
WmMcK's picture

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

Thu, 05/29/2014 - 10:12 | 4805430 pragmatic hobo
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.

Thu, 05/29/2014 - 10:19 | 4805470 tuttisaluti
tuttisaluti's picture

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

Thu, 05/29/2014 - 10:25 | 4805488 bagehot99
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.

Thu, 05/29/2014 - 10:40 | 4805542 Bernoulli
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.

Thu, 05/29/2014 - 10:27 | 4805492 BeerMe
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.

Thu, 05/29/2014 - 10:37 | 4805530 cowdiddly
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

Thu, 05/29/2014 - 10:48 | 4805578 Quinvarius
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.

Thu, 05/29/2014 - 10:49 | 4805585 Smegley Wanxalot
Smegley Wanxalot's picture

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

Thu, 05/29/2014 - 11:25 | 4805745 Chuck Knoblauch
Chuck Knoblauch's picture

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

No consequences if Goldman loses, right?

Thu, 05/29/2014 - 12:36 | 4806000 Puncher75
Puncher75's picture

Who are the retards that are buying this nonsense?

Thu, 05/29/2014 - 13:45 | 4806387 ejmoosa
ejmoosa's picture

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

Thu, 05/29/2014 - 14:16 | 4806563 Notsobadwlad
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.

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