IMF Cuts US GDP From 2.0% To 1.7% As US Retail Sales Forecast Slashed From 4.1% To 3.6%: Winter Blamed

Tyler Durden's picture


This is what happens when a priced to perfection global economy (and well beyond perfection based on the S&P 500) runs into the utterly and completely unpredictable and unforseeable "harsh winter weather."

First, the IMF just cut (again) its forecast for US GDP, this time from 2.0% to the consensus-estimate 1.7%. The IMF cited the 1Q contraction, which from a +3% original estimate ended up being that, just with a minus sign. It also says second-half growth to accelerate... because it must!

  • Some other brilliant points from the IMF:
  • IMF staff: U.S. to reach full employment “only by end-2017”
  • “The economy is expected to reach full employment only by end-2017 and inflationary pressures are expected to remain muted”
  • “If true, policy rates could afford to stay at zero for longer than the mid-2015 date currently foreseen by markets”
  • Says job market “reasonably healthy,” wages should rise slowly

Or not at all.

And while IMF just slashed its 2014 forecast, it kept its growth forecast steady at 3%. Tomorrow the IMF releases its entire World Economic Outlook quarterly pamphlet which has been the source of so much amusement around these parts. We can't wait to update it for tomorrow's latest and greatest growth slashing.

And just so the IMF doesn't appear alone as the only idiot who, for the 5th year in a row, issued an optimistic forecast about US growth which is crashing before its eyes, here is the National Retail Federation which also just cut its 2014 retail sales growth outlook from 4.1% to 3.6%.

The National Retail Federation today lowered its retail sales forecast for 2014 because of slow growth recorded during the first half of the year, but said sales are expected to grow significantly faster over the next five months. NRF forecasted in January that retail sales would grow 4.1 percent in 2014 over 2013, but today’s revision lowers the forecast to 3.6 percent.


NRF calculated that sales grew 2.9 percent during the first half of the year and are expected to grow at least 3.9 percent during the second half. The numbers include general retail sales and non-store sales, and exclude automobiles, gasoline stations, and restaurants.


“No retailer was immune to the doldrums witnessed during the first quarter, and as a result, the year’s growth trajectory was impacted,” said NRF President and CEO Matthew Shay. “That said, there is plenty of evidence that the second half of the year will be better for the industry as consumers begin to feel more optimistic about their spending decisions.


“And though we maintain realistic expectations of retail sales growth in 2014, we are optimistic that the chances for a stronger economy still exist,” continued Shay.


“The severe weather and other factors we experienced earlier this year have taken their toll on retail, but most of those problems are behind us,” said NRF Chief Economist Jack Kleinhenz. “A second look at our forecast shifted our expectations slightly, but it’s important to note that the outlook is positive. Sales are growing and we expect them to continue at a moderate pace.”


In this month’s Monthly Economic Review, Kleinhenz noted, “…one of the worst winters in recent memory kept shoppers home during the first quarter, and weak numbers for real estate, inventories and exports continued to hamper the economy through the second quarter. However, employment has grown at its strongest pace since 2005, business and consumer confidence have edged higher, manufacturing activity has expanded and inflation pressures remain tame, improving expectations for the second and third quarters.”

And while we enjoy the "it's the weather's fault" joke as much as the next one, can we please move on: said joke hasn't been funny in about 5 months now.

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Wed, 07/23/2014 - 12:08 | 4993338 ebworthen
ebworthen's picture

-1% GDP but it will never be reported.

Wed, 07/23/2014 - 12:10 | 4993347 kowalli
kowalli's picture

it should be more that -3% GDP, more than Q1

Wed, 07/23/2014 - 12:15 | 4993378 fonzannoon
Wed, 07/23/2014 - 12:25 | 4993446 flacon
flacon's picture

If GDP goes down that means it's good to buy SPY because GDP is oversold, right? /sarc

Wed, 07/23/2014 - 12:28 | 4993469 Herd Redirectio...
Herd Redirection Committee's picture

I love it, they can't quite 'diagnosis' what is causing the doldrums, but they do know for sure that the economy is strong.  So no problem there!  Of course the Fed and the US Gov't are doing all they can to HELP, so they aren't the problem either (apparently).

"After all, Dicks first expanded heavily into golf in 2007. Golf survived the Great Recession but can't hack the sense of ennui of 2014."

So they admit this is worse than 'the Great Recession' a couple years back, but we were in recession then, but not now!  My brain hurts...

Wed, 07/23/2014 - 12:44 | 4993591 Headbanger
Headbanger's picture

Please do not worry...

Wed, 07/23/2014 - 13:17 | 4993784 Stackers
Stackers's picture

Still waiting on my wages to slowly rise ......... and waiting ..... and waiting

Wed, 07/23/2014 - 13:49 | 4993980 Son of Loki
Son of Loki's picture

Fannie Mae slashes forecast for new-home market over past year

Wed, 07/23/2014 - 12:45 | 4993593 pods
pods's picture

Dick's can suck my bit fat one.  

Damn store started where I grew up and is nothing like what it was.
For all of you who don't remember Dick's back then, they actually used to sell things you WANTED to buy.

Now they should basically call themselves an Under Armor store for metro-sexual wannabees.  

God forbid you want to get some fishing line.  They have every size, color and lb test EXCEPT the popular kinds, which when that sold out, are gone for the season.

So now I go to the Redneck Disneyland (bass pro) or to Gander Mountain.  


Wed, 07/23/2014 - 13:19 | 4993796 TeethVillage88s
TeethVillage88s's picture

Yeltzin is in a Den of Thieves.

She probably doesn't even realize it. As others have said she might have been an academic protected from what business is really like.

What we had was a Marriage BTW Yuppies & Martial Arts Books on Wall Street. Remember? 1980s Wall Street Started up with:

A) The Book of Five Rings
B) The Art of War
C) Machiavelli

Wolf of Wall Street, Wall Street, Greed is Good.

You look at these names and you know USA has a Leadership Problem and not one of these nor Barak Obama will address any of our Real Problems OR Take on the Responsiblity for the Whole Country.

Janet Yellen, Chairman of Fed
Jacob Lew, Secretary of the Treasury
Thomas J. Curry, Comptroller of the Currency
Mary Jo White, Chairman SEC
Timothy Massad, Director CFTC
Richard Cordray, CFPB
Martin Gruenberg, FDIC
Mel Watt, FHFA
Debbie Matz, NCUA
S. Roy Woodall, Jr.

So do we look to Europe and see who is on FSB

Mark Carney, BOE
Janet Yellen, FED
Christine Lagarde, IMF
Jim Yong Kim, WB
Mario Draghi, ECB
José Manuel Barroso, EC
Herman Van Rompuy, EU
José Ángel Gurría, OECD
Maria Helena Santana, IOSCO (Securities)
Hans Hoogervorst, IASB (Accounting)
Director IAIS (Insurance)
Jaime Caruana, BIS
Representatives from the G20

I Doubt the FSB is working well with US Rep. There are too many power players in the USA and many of them are behind the scenes. Besides the US Empire likes to make the Decisions before it meets with other Representatives.

Wed, 07/23/2014 - 15:08 | 4994426 Seer
Seer's picture

So, you KNOW what the REAL problems are?

Here, I'll take a "stab:"

1) Resources, which are necessary for growth, are in decline- growth is dead;

2) On one hand we believe that govt cannot create anything, and on the other hand we think we can resolve our problems by "fixing" govt.- even total elimination of govt (which would be OK with me) does NOT resolve #1.

Wed, 07/23/2014 - 13:36 | 4993900 Dollarmedes
Dollarmedes's picture

Hey, cut the IMF some slack. They were only off their Q1 predictions by 200%...that's totally ballpark.

Wed, 07/23/2014 - 13:00 | 4993678 slightlyskeptical
slightlyskeptical's picture

Summer was too short because of the long winter. But things will be better in the fall.

Wed, 07/23/2014 - 12:59 | 4993679 John Law Lives
John Law Lives's picture

This is an interesting excerpt from the article you cited;

"It's not just weather-related things like golf. Americans aren't even going to the movies anymore either. July box office is off 30% compared to last year. It's the worst year for American cinema since 2011."

Wed, 07/23/2014 - 13:09 | 4993732 Nick Jihad
Nick Jihad's picture

Clearly, we need more sequels of movies based on super-hero comic books.

Wed, 07/23/2014 - 13:58 | 4994049 twh99
twh99's picture

No, we just need "decent" movies.  And I don't mean family oriented necessarily.  Some of the crap they have been trying to shove down our throat is just not worth the price of admission.

Wed, 07/23/2014 - 14:06 | 4994077 NidStyles
NidStyles's picture

Those are the only movies actually doing well. 

Wed, 07/23/2014 - 15:19 | 4994504 Seer
Seer's picture

Yeah, they all try to keep us from really seeing reality.  Issue has to do with declining disposible income.  Over the years we've been shown that consumer debt levels had been dropping (they've been up-ticking for afew quarters now); and, well, gee, Wally, where did the money come from to do that?

Criagslist is a great place to watch for trends.  People are really starting to look to unload their toys.

Wed, 07/23/2014 - 12:17 | 4993394 pods
pods's picture

You have to admit it that this winter was the worst in a long ass time.

Amazon was closed for like half the winter.  I heard there were some storms that took down the entire internet for weeks.


Wed, 07/23/2014 - 12:19 | 4993407 icanhasbailout
icanhasbailout's picture

It's light compared to the winter we're having this summer.

Wed, 07/23/2014 - 12:40 | 4993553 Herd Redirectio...
Herd Redirection Committee's picture

Silly me, here I thought you make YoY comparisons to eliminate the 'noise' caused seasonality, what was I thinking?

Wed, 07/23/2014 - 13:09 | 4993725 sbenard
sbenard's picture

It's all those "intangibles"!

Wed, 07/23/2014 - 12:09 | 4993340 yrad
yrad's picture

I haven't been to a Mall in 3 years. Suck it, Macy's!

Wed, 07/23/2014 - 12:27 | 4993460 Renewable Life
Renewable Life's picture

They live in a fucking fantasy land, of course they think it's going to be 3.7%
Are you kidding me, they'll be lucky if it is above water, a tenth of a point!!!

Even the reckless little teenagers are out of their parents money this summer, have you looked at the box office numbers?

Mr(s) Yellen better recheck her inflation numbers, because gas at 20 year and food at 50 year adjusted highs, isn't going to put much "velocity" in a beat to fuck economy because of overtaxation and regulation!!!!!!

Wed, 07/23/2014 - 12:34 | 4993508 Herd Redirectio...
Herd Redirection Committee's picture

Inflation is modest.

How much to go to the movies and buy some popcorn and a drink, again?

I remember one person could go for $10 or less, what,  a decade ago.  Never mind if it was Cheap Tuesdays.  I know it has probably doubled since, but Hollywood garbage just not entice me to find out for sure.

But a rough estimate shows doubling in 10 years equals annual inflation of AT LEAST 7%.  Modest.

Wed, 07/23/2014 - 12:42 | 4993571 fonzannoon
fonzannoon's picture

those numbers are inflated because u guys don't take substitution into consideration. if movie tickets go up in price people PREFER to watch TV at home. if watching TV at home costs too much people PREFER to sit and play with their balls and cry. if sitting and playing with their balls and crying costs too much people PREFER to blow their brains out....

u see?

Wed, 07/23/2014 - 12:52 | 4993640 Herd Redirectio...
Herd Redirection Committee's picture

My hedonic adjustment ability is minimal, you are right.

I am not great at enjoying Spam as much as steak.  I feel really bad for the guys who have to calculate how much cheaper TVs, smart phones, etc are.  Price last year (w/o 3D): $800.  Price this year (w 3D): $950.

Price compared to last year: (950-200 for 3D)/800= 93.75%

No inflation, see!

Wed, 07/23/2014 - 12:28 | 4993463 Quinvarius
Quinvarius's picture

The one near my house closed.  So me too.

Wed, 07/23/2014 - 13:02 | 4993683 1stepcloser
1stepcloser's picture

Picking up teenage sluts on the web, just isn't the same at a nice slut at the mall...God I miss the 80s

Wed, 07/23/2014 - 14:16 | 4994124 Herd Redirectio...
Herd Redirection Committee's picture

Side 1 of Led Zeppelin IV, FTW!

Wed, 07/23/2014 - 12:09 | 4993345 Pladizow
Pladizow's picture

Bankers blaming God!

But wernt they doing his work?

Wed, 07/23/2014 - 12:11 | 4993346 Squid Viscous
Squid Viscous's picture

sounds like something Ol' Yeller stovepiped down their throats... "inflation to remain muted through 2017"... that's nice to know, selling all my PM's asap

Wed, 07/23/2014 - 12:45 | 4993595 TeethVillage88s
TeethVillage88s's picture

Yeltzin never mentions Anchor Store closings in Malls across the USA. Sears & JC Penny. Feds own charts show restructuring in Retail means fewer Jobs.

So, one harsh winter and boom, JC Penny & Sears have to close stores. Such a Fragile Industry. But both stores are probably older than most on ZH.

Wed, 07/23/2014 - 12:10 | 4993349 Last of the Mid...
Last of the Middle Class's picture

“No retailer was immune to the doldrums witnessed during the first quarter, and as a result, the year’s growth trajectory was impacted,”       Well Duh! Someone needs to do a captain obvious commercial about this line with our esteemed leader in the idiot jacket. Does the pharase "tapped out" mean anything to you disconnected dolts attempting to control every aspect of our economy?

Wed, 07/23/2014 - 12:14 | 4993371 NoDebt
NoDebt's picture

"Economic growth?  I don't need it right now."

"Thanks, Captain Obvious."

Wed, 07/23/2014 - 12:36 | 4993526 Herd Redirectio...
Herd Redirection Committee's picture

Paying off debt means what happens to disposable income?  And the gov't has the most debt in town/world, you say?  This should end well.

Wed, 07/23/2014 - 12:13 | 4993359 swass
swass's picture

Since Winter comes every year, we're really screwed.

Wed, 07/23/2014 - 12:19 | 4993401 SHEEPFUKKER

Don't forget about el no no

Wed, 07/23/2014 - 12:13 | 4993361 Ward no. 6
Ward no. 6's picture

actually i spend more in winter...

need xtra sweaters, new coats, shovels, ice remover, etc.

Need to get a snow blower....

winter actually makes me spend more....

Wed, 07/23/2014 - 12:26 | 4993453 Quinvarius
Quinvarius's picture

And talk like that is why the US bankers told the US government that you fired a missile at an airliner in Ukraine.

Wed, 07/23/2014 - 12:12 | 4993363 Seasmoke
Seasmoke's picture

And winter is coming back soon !!!!

Wed, 07/23/2014 - 12:25 | 4993441 espirit
espirit's picture

Good thing we'll have plenty of fiat to burn when the lights go out.

Wed, 07/23/2014 - 12:14 | 4993370 Colonel Klink
Colonel Klink's picture

Remove excessive government spending, and central bank support.  Now please report real global GDP.

Get bent IMF!

Wed, 07/23/2014 - 12:16 | 4993379 orangegeek
orangegeek's picture

Slashed forecasts - and we common folk would never guess that these forecasts are best case scenario and that reality is much worse.


Looking forward to negative US Q2 GDP on July 30 - one week from today.  POMO reset on July 31 - down to $25B for August.


And then we get to listen to yellen as to how everything is either noisy or on target.

Wed, 07/23/2014 - 12:39 | 4993504 espirit
espirit's picture

Everybody appears to have a sub-conscious desire to dig in, as in underground.

This mass appeal is not comfortable.

(nmewn, will you share your high ground with me?)

Wed, 07/23/2014 - 13:10 | 4993737 ArkansasAngie
ArkansasAngie's picture

The minus print will take at least two revisions.  Don't want to spook voters

Wed, 07/23/2014 - 14:01 | 4994055 twh99
twh99's picture

Just ask yourself a question, when was the last time any of these asswipes actually predicted a recession?

Wed, 07/23/2014 - 12:20 | 4993392 starman
starman's picture

But all them behemot American corporations restructuring should help that 3rd and 4th quarter GDP number.Almost forgot lay off numbers but those are no longer tracked by depart ment  of labor because of the recovery! 




Sarc sarc sarc sarc

Wed, 07/23/2014 - 12:18 | 4993402 JRobby
JRobby's picture

It snowed and was cold last winter

It is raining and will be hot this summer

Consumers, we have found will only spend on clear dry days betweek 50 and 70 degrees so we are downgrading our forecast.

So this would be reflected in an increasing savings rate?????......

Wed, 07/23/2014 - 12:21 | 4993425 Emergency Ward
Emergency Ward's picture

If it's between 50 and 70 and clear, consumers will be out hiking or going to the beach.

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