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Goldman Adjusts Q2 GDP... Again

Tyler Durden's picture


It's becoming a farce now: if it is a day ending in -y, Goldman has to tweak their Q1 GDP tracking forecast. Sure enough...

BOTTOM LINE: Philadelphia Fed index improves less than expected and remains significantly negative. Existing home sales much weaker than expected in June, although house prices show another gain. We lowered our Q2 GDP tracking estimate from 1.2% to 1.1%.




1. The Philadelphia Fed index improves less than the consensus had expected, from -16.6 to -12.9 (versus -8.0 expected). The composition of the report was a bit more favorable than the headline would suggest as new orders and shipments both improve (up from -18.8 to -6.9, and up from -16.6 to -8.6, respectively). However, both indices remain in negative territory. Furthermore, the employment index declines (from 1.8 to -8.4) and the index for firms’ expectations for capital spending in six months’ time declined sharply (down from 19.4 to 3.3); the latter figure is the lowest since September 2009.


2. Existing home sales decline by -5.4% (month-over-month) in June, much weaker than the consensus had expected. The level of existing home sales (4.37m at an annualized rate) is also lower than expectations (4.62m), despite upward revisions to the May figure (from 4.55m to 4.62m). Like last month, the decline was again driven by weakness in both single family homes and condos (down 5.1% and 7.8%, respectively). On the other hand, median sales price of all existing homes increased by 7.9% (yoy) to $189,400 in June. This is the highest growth rate since February 2006 and the highest level since September 2008, pointing to a continuing slow pickup in house prices.


3. Following the weaker-than-expected existing home sales report, we lowered our Q2 GDP tracking estimate from 1.2% to 1.1%.

Who would have though High Frequency Economics would truly live up to its name...

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Thu, 07/19/2012 - 10:53 | 2631937 FieldingMellish
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Thu, 07/19/2012 - 11:00 | 2631979 FEDbuster
FEDbuster's picture

Selling the Muppets some hopeium?  Look for a sub 1% quarter. Back into the shit abyss by year's end.

Thu, 07/19/2012 - 11:13 | 2632053 Careless Whisper
Careless Whisper's picture

Goldman always gives good quality economic forecasts to the general public. They love us, and they care.


Thu, 07/19/2012 - 11:25 | 2632123 FlyoverCountryS...
FlyoverCountrySchmuck's picture


Thu, 07/19/2012 - 15:15 | 2633213 FEDbuster
FEDbuster's picture

"Goldman always gives good quality economic forecasts to the general public. They love us, and they care."

Just doing "God's work".

Thu, 07/19/2012 - 11:16 | 2632077 battle axe
battle axe's picture

Goldman just admit it, you do not know what the hell is going on, and your model is broken....

Thu, 07/19/2012 - 12:14 | 2632385 Stoploss
Stoploss's picture

No US bill auctions to bail it out either, today or tomorrow.

Thu, 07/19/2012 - 10:53 | 2631939 insanelysane
insanelysane's picture

CNBS will say that GDP rebounded just like they did with the labor number today.

Thu, 07/19/2012 - 10:56 | 2631950 Jlmadyson
Jlmadyson's picture

1.1%.....teetering toward recession while the Fed sleeps at the wheel.

Bankers finally getting some just deserts haha.

An epic tale if I ever saw one.

Thu, 07/19/2012 - 10:58 | 2631971 Zola
Zola's picture

SO let me think, these guys are being pay 300k+ per head to be REACTIVE not PROACTIVE ??? 

Another perfect example of total and utter cluelessness

Thu, 07/19/2012 - 10:59 | 2631974 Vincent Vega
Vincent Vega's picture


Thu, 07/19/2012 - 11:03 | 2632001 LongSoupLine
LongSoupLine's picture

Goldman is no better than a GPS with real bad turn-by-turn instructions.

Thu, 07/19/2012 - 11:09 | 2632029 Temporalist
Temporalist's picture

No Goldman is worse because their intent is to drive you into a bad neighborhood and car-jack you then lay the blame on politicians and lack of enforcement and when accused say "I don't remember" and get off free so they can car-jack the next poor shmuck.


Roll `em up!


Thu, 07/19/2012 - 11:06 | 2632018 Cognitive Dissonance
Cognitive Dissonance's picture

Only a tenth of a percent change Tyler. I'll sit up and take notice when the daily/weekly change comes in full percentage points.

Wait.......wait........wait for it cus it's coming.

Thu, 07/19/2012 - 11:20 | 2632096 Rainman
Rainman's picture

1% means the whole growth banana is massive gubmint deficit spending....that is all.

Thu, 07/19/2012 - 11:52 | 2632247 insanelysane
insanelysane's picture

There are only so many tenths of a percentage to go.  There is an old illustration of how things can snap with only a small move.  A professor takes a ruler and puts it on desk so one edge of ruler is at edge of desk.  Prof starts pushing ruler 1 inch at a time, think tenths, as it is only 1 inch movement.  Obviously when the ruler is pushed past the rubicon it falls to the floor even though nothing happened the first 6 times the ruler moved 1 inch.

Now place the economy on the edge of a fiscal cliff and start moving cpi, gdp, libor, treasury rates, unemployment rate, etc just a tenth of a percent each day or week or month.

Thu, 07/19/2012 - 11:08 | 2632026 adr
adr's picture

Real GDP has been contracting since 2000, only the expansion of bullshit peddled by the banksters has increased the phony number.

Do we really need to count financial engineering and healthcare nobody can afford as adding to GDP?

Thu, 07/19/2012 - 11:08 | 2632027 monopoly
monopoly's picture

Goldman should just have a brief each business day called the "GDP reduction show".

And it always drives me batty when the data, as WE expect here at Zero Hedge, is weaker and the MSM always, always advise that the weaker data is "unexpected". What a crock of shit reporters and their bosses have become.

Thu, 07/19/2012 - 11:15 | 2632073 Jlmadyson
Jlmadyson's picture

They can only spin for so long before it all rolls back again like 2008. Just about every measure of the economy is falling at a rapid pace.

Jim Cramer, you have no idea speeches coming before year end.

Thu, 07/19/2012 - 11:10 | 2632040 monopoly
monopoly's picture

Our economy and this planet are all headed into a deep recessions.....and the averages are UP! Beyond words. MS the next one to blow up?

Thu, 07/19/2012 - 11:14 | 2632063 Hal n back
Hal n back's picture

i thought lasts weeks adj was to 1.1%.


and if the fed waits any longer its gonna have to print several trillion to stop the bleeding. (or more than several)-a body in motion tends to stay in motion theory of inertia.


My kids could do a better job.

Thu, 07/19/2012 - 11:14 | 2632066 Snakeeyes
Snakeeyes's picture

You have to admit, it is hard to measure GDP at the zero bound. Nothing is working and Obama/Congress keep heaping the regulations on top of it.


Thu, 07/19/2012 - 11:22 | 2632107 crawldaddy
crawldaddy's picture

are you paying any attention at all? Regulations arent the problem.  Not enforcing regs is the problem.  


De-reg and poor enforcement is at the heart of the problem here.

Thu, 07/19/2012 - 11:15 | 2632074 Hype Alert
Hype Alert's picture

No problem.


In one short, self-damning statement, New York Senator Charles Schumer's plea to Ben Bernanke to "get to work, Mr Chairman,"

Thu, 07/19/2012 - 11:19 | 2632093 The1Ash10
The1Ash10's picture

Goldman has proven to be one of the most reliably unreliable sources of GDP forecasts out in the market today.

Thu, 07/19/2012 - 11:21 | 2632103 Hal n back
Hal n back's picture



the above is the 7/16 GS adjustment to 1.1%---wtf--

Thu, 07/19/2012 - 11:23 | 2632112 orangegeek
orangegeek's picture

And the Dow is giving it one more push to complete wave 2 up before the onset of wave 3 down.



Thu, 07/19/2012 - 11:25 | 2632122 reader2010
reader2010's picture

just any software virus definition, goldman's numbers need updating every minute now.

Thu, 07/19/2012 - 11:42 | 2632130 Temporalist
Temporalist's picture

"Morgan Stanley (MS) reported a 50 percent drop in earnings and said it will cut more jobs as revenue from trading stocks and bonds declined the most among Wall Street banks."



"Deutsche Bank AG (DBK), Europe’s biggest bank by assets, is considering cutting about 1,000 positions at its investment bank as revenue declines, according to a person with knowledge of the matter."


Thu, 07/19/2012 - 11:28 | 2632136 Hal n back
Hal n back's picture

Precious Metals should be exploding up in price now. You cannot tell me that the idiots on Wall Street and in DC who brought us this mess are ignorant of the true problem and are not protecting themselves in spades.


And maybe even protecting some of their favorite family  friends and clients. Then they put out the all out buy calls on PM.


First your self

then friends and family

then preferred clients

then the rest (of whoever still has liquid assets to buy PM-and not assets tied up in a 401k company account that does not give precious metals or commodity choices)




Thu, 07/19/2012 - 11:33 | 2632165 BrigstockBoy
BrigstockBoy's picture

God only rested one day...GS is doing more than God's work.

Thu, 07/19/2012 - 11:56 | 2632266 JackT
JackT's picture

Real-time updates ensures that there are no surprises when the final announcement is made.

Thu, 07/19/2012 - 12:28 | 2632479 Missiondweller
Missiondweller's picture

At 1% GDP, we're in a recession again by almost anyone's measure of inflation.


ADR is right, we've likely been contracting since 2000, especially if you use Shadow Stat's inflation calculation.

Thu, 07/19/2012 - 12:33 | 2632511 Meesohaawnee
Meesohaawnee's picture

you can print a -5 GDP.. Ben will still program the algos to 1400 .. No data point whatsoever means a thing anymore. Rendered useless. Philly Fed, Unemployment, GDP (Like it ever really meant anything) PPI,CPI. nothing. All wiped out thanks to Ben

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