Atlanta Fed Slashes Q1 GDP Forecast To Just 0.5%, Lowest In Three Years

Tyler Durden's picture

Just over two months ago, the Atlanta Fed "calculated" that Q1 GDP was going to be a pleasant 3.4%, confirming that the Fed had made the correct decision by hiking not only in December, but also last month. Since then, the Fed's own GDP estimate has crashed in almost linear fashion, and as of this morning - after the latest disappointing retail sales report - it had plunged to just 0.5%, which if accurate would make Q1 the weakest quarter going back three years to Q1 2014.

From the regional Fed:

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2017 is 0.5 percent on April 14, down from 0.6 percent on April 7. The forecast for first-quarter real consumer spending growth fell from 0.6 percent to 0.3 percent after this morning's retail sales report from the U.S. Census Bureau and the Consumer Price Index release from the U.S. Bureau of Labor Statistics.

Putting the Atlanta Fed's forecast in context, a 0.5% GDP would mark the weakest quarter in 37 years, or going back to 1980, in which the Fed hiked rates. Then again, considering today's abysmal CPI and retail sales data, the narrative to focus on next is not so much hiking, or balance sheet normalization, but when the Fed will resume easing, cut rates (as per Donald Trump's recent suggestion) and/or launch QE4.

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FrozenGoodz's picture

What's taking so long to get to 0?


Another GOP induced recession looms ... sigh

chicken_goose's picture

Political pressure most likely, with all the bad data out there this number must be below zero in reality by now.

kliguy38's picture

Yes....the real reason we seem to have lost our minds in going to war this week...........collapse

Looney's picture


Come on! Raytheon alone should be able to bring the GDP up to the coveted 3%.  ;-)


curbjob's picture

We're  going to need a bigger debt bomb.

yrad's picture

Please tell me we kept a strand of Volker's hair in case we need to clone him. 19% mortgage rates here we come! Let's just "release the hounds!!"

UnschooledAustrianEconomist's picture

MAODB. And the Chinese build their FOADB.

xrxs's picture

Every cruise missile has about 15kg of silver. Something for everyone,  even the stackers.

monad's picture

Raytheon outsourced all that to the EU. That's why SoGen is bragging. They'll make out and they aren't even the primary target this time.

Consuelo's picture



The Left/Right Koolaid is as potent as it is irresistable.    Hang in there though, it is always darkest before the light ---

GUS100CORRINA's picture

FrozenGoodz ...

GOP induced recession looms ... REALLY? 

Data for the last two years being published on ZH was SCREAMING RECESSION!

FrozenGoodz ... you must be a BEAR who just woke up from hibernation. You must have been reading all that FAKE NEWS from WAPO or NYT and finally realized just today that they were lying to you.

If most of America believes, like you, that this just started this year, then America is really in trouble. Data fact: Earnings have been flat to down since 2014. So how did the market go up? One word: DEBT!

MFL5591's picture



Another GOP recession?  


Are you serious?  No one could be this stupid.  8 years of a failed President Obama, 3 months of GOP in office and they are responsible for first quarter growth?    Maybe 1st quarter of 2018 but 2017?  My god, why do they allow such stupidity on this site? 

FrozenGoodz's picture

Have it both ways some ... didn't they parade the job numbers three weeks in ... having done zilch to influence such sans tweet bigly threats at corpos resulting in millions in tax breaks ... but the GDP number isn't his?


Obama clawed us out of a financial crisis ... that the GOP gifted ... the market tripled ... brought some boots back home ... and had 70+ months of 200k jobs added or something terrible like that ... idk how your struggles are personally ... but I'm doing ight ... and yes ... while president you're held accountable

Games Without Frontiers's picture

Make sure to check out our fine selection of financial derivatives on your way out the door.

NDXTrader's picture

The Fed is not data dependent, it is President dependent

lester1's picture

Data doesn't matter to Yellen and her globalist cronies at the Fed.

Raising rates and fucking President Trump is all that matters now.

Cautiously Pessimistic's picture

This should green light another quarter point raise for sure.

Deep Snorkeler's picture

1. Alibaba is the world's most valuable retailer, yet holds no inventory.

2. Airbnb is the world's largest provider of acommodations, but owns no real estate.

3. Uber is the world's largest car service, but owns no cars.

wisehiney's picture

CNBC - "Mr Tepper are you short treasury bonds?"

David Tepper - "You bet your hiney."


Same day - wisehiney - "Be right and sit tight."

                                  "Get paid to wait."


Looks like the hiney wins that bet.


wmbz's picture

Damnit Janet! We need MOAR!

You know that will fix it. It has worked so well before.

BandGap's picture

The wars aren't to stimulate any growth, they are to intimidate others into holding the status quo.

Wonder what Trump said to Xi. The US has planned this NK shit well in advance or the Chinese would have reeled pumkinhead in already. Now the US is going to blow the shit out of NK, maybe in an effort to reunite the two Koreas. Wouldn't China just love that? And if people think we have been surrounding Russia, look at China's neighbors - Korea, Japan, Viet Nam, Philippines, Australia.......and the Indians are not too fond of the Chinese either.

And the THAAD antimissile system is in place in South Korea.



orangegeek's picture



thanks, ya fucking nigga

Midnight Rider's picture

GDP is very noisy...

Janet Yellen

small axe's picture

so only two rate increases this year? Never underestimate the Fed's arrogance. Stupid as it may be, Janet might simply take this little speedbump of a cratering economy in stride and continue on the Fed's path of maximum gain for the fewest. It's worked pretty good so far. Her base is pleased. Personally, I hope it all spirals out of control, crashes and burns, and the Fed goes up in flames.

Time for reset

shimmy's picture

But the great pumpkin has gone on twitter to say how amazing the economy is now that he is president so this can't be true. 

buzzsaw99's picture

the great pumpkin - awesome

LawsofPhysics's picture

LOL!  The Atlanta Fed had better be careful or they will have more bridges to build...

Silver Savior's picture

I keep telling everyone things are getting worse but they don't believe me.

Bammers's picture

People have been saying that on ZH for years now.  There are so many who went broke on here being too bearish too soon.  SO, what ever.

TheMayor's picture

Yep, buy the fucking dip!

Bammers's picture

The crash is coming there is no doubt bout it.  But as far as timing the crash there is one analyst that has been showing who actually makes accurate and timely predictions.

OckhamsRazr's picture

agree.  I think that their short term signals have been dead on and that they will give some serious drastic changes in their longer term changes. So far they have been dead on while everyone else has been too bearish for the last few years. let's see how this plays out. 

Aubiekong's picture

Between a falling economy and a real threat to abandon the dollar by China and Russia as the reserve currency Trump is left with only one choice.... WAR

imapopulistnow's picture

Conspiracy theory time: ADP (private) showed 200k + job growth while BLS (public) showed under 100k. Gallup (private) shows roughly 10% gain in average daily discretionary expenditures while Census (public) shows retail sales decline. Why? Perhaps (public) data manipulation/overstating for political purposes must now be reset back to reality now that the election cycle is over? Just a thought...

TheMayor's picture

Let me just say this, in my city the mall is packed and people are spending freely.

Not sure what the problem is in Atlanta.

That Q1 is so yesterday, it ended 2 weeks ago and they are giving us a revised forecast?


That is not a forecast, that is a rear view mirror.



The economy is booming where I live.