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Goldman Cuts Q1 GDP Forecast To 1.8% On Trade Deficit Surge

Tyler Durden's picture


Moments ago we tweeted that today's surge in the trade deficit will force banks to start cutting GDP forecasts. Sure enough, Goldman as usual, is the first to set the tone, by cutting its ultra real time GDP forecast from 2.0% to 1.8%.

BOTTOM LINE: Q1 GDP growth tracking +1.8% after trade, employment and wholesale inventory reports


1.    This morning’s data had a modest negative impact on our tracking estimate of Q1 GDP growth. On net, we revised down our estimate to +1.8% from +2.0% previously.


2.    First, imports increased more than expected, and because this occurred early in the quarter it had an outsized impact on the quarterly average growth rate. On its own, the upward revision to our imports estimate would have taken our forecast for Q1 growth from 2.0% to 1.3%. However, the larger drag from imports was partially offset by a few other positives. First, exports increased more than expected in January, helping lift Q1 net trade. Second, the composition of the trade report showed fewer net exports of capital goods. This implies that more capital goods shipments were used for domestic purposes, and therefore boosts our estimate of business capital spending on equipment and software. Third, state and local government employment was above our forecast, and we therefore nudged up our estimate state and local government spending in Q1 GDP. The wholesale inventories report was broadly in line with our expectations


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Fri, 03/09/2012 - 11:41 | Link to Comment SolidSnake961
SolidSnake961's picture

next up will be JPM

Fri, 03/09/2012 - 12:28 | Link to Comment malek
malek's picture

This revision is going to be revised again this afternoon by Goldman.

Fri, 03/09/2012 - 11:41 | Link to Comment azzhatter
azzhatter's picture

Oh, no!! Say it ain't so. Things are going so well. I expect next month adding 647,000 jobs

Fri, 03/09/2012 - 11:43 | Link to Comment khakuda
khakuda's picture

Oh no, I suppose we have to print more money!!!

With equities skyrocketing over the past couple years and employment slowly improving, it is amazing the Fed has actually managed to keep the 10 year from going to 3%.  Gotta give the ponzi its props.

Fri, 03/09/2012 - 11:43 | Link to Comment LongSoupLine
LongSoupLine's picture

bullish...algo's creating green cliff face candles.  Entire sell-off is now gone.  unreal...

Fri, 03/09/2012 - 11:48 | Link to Comment crawl
crawl's picture

Yup, it's crazy.
At least the vocal demands for QE3 from Tuesday have taken a rest. For the moment.

Fri, 03/09/2012 - 11:54 | Link to Comment Divided States ...
Divided States of America's picture

Fuckin House of Cards is augmented by Super Crazy Glue endorsed by the Bernank and the ECB

Fri, 03/09/2012 - 12:37 | Link to Comment SheepDog-One
SheepDog-One's picture

Well of course, the 'QE Sterile' rumor did its job well, recovered the 'abnormality' of the -200 DOW drop. All is well again, markets back up, no need for further QE rumors at this point.

Fri, 03/09/2012 - 11:43 | Link to Comment slewie the pi-rat
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Fri, 03/09/2012 - 11:44 | Link to Comment ZippyBananaPants
ZippyBananaPants's picture

aint thet the tird time this mont?

Fri, 03/09/2012 - 11:44 | Link to Comment DavidC
DavidC's picture

Can someone tell me why the stock market is holding up today with all this?


Fri, 03/09/2012 - 11:46 | Link to Comment battle axe
battle axe's picture

Employment BS numbers.

Fri, 03/09/2012 - 11:53 | Link to Comment Moneyswirth
Moneyswirth's picture

There is no stock "market".  This is not a market in the classical sense anymore. 

Fri, 03/09/2012 - 12:35 | Link to Comment SheepDog-One
SheepDog-One's picture

'Markets' just like a rudderless supertanker now. Only way it can be turned is when tugboats ram it one direction or another.

Fri, 03/09/2012 - 11:45 | Link to Comment SimpleandConfused
SimpleandConfused's picture

It is always simple with ZIRP.  The news "no matter":  BTFD

Fri, 03/09/2012 - 11:47 | Link to Comment Benjamin Glutton
Benjamin Glutton's picture

Is Stolper doing Goldman's GDP re-re-re-forecasts?

Fri, 03/09/2012 - 11:50 | Link to Comment resurger
resurger's picture

i want to see the volume on stox later today ..  

Fri, 03/09/2012 - 11:51 | Link to Comment Moneyswirth
Moneyswirth's picture

So much for today's bullshit NFP report.  Good luck trying to improve the employment disaster with anemic economic growth. 


Fri, 03/09/2012 - 12:16 | Link to Comment Rainman
Rainman's picture

Here's some more bullshit about why high oil prices are not as bad as in the 80s. Grab your barf bag.

Fri, 03/09/2012 - 12:19 | Link to Comment surf0766
surf0766's picture

All related to hedonics at some point. Manipulation

Fri, 03/09/2012 - 12:33 | Link to Comment SheepDog-One
SheepDog-One's picture

Like CNBC bubbleheads announced the other day...'High prices are now good, because we're more used to paying high prices now'! HAHZAH!!

Fri, 03/09/2012 - 12:19 | Link to Comment tahoebumsmith
tahoebumsmith's picture

Most importantly you need to go back and look at the debate from the debt ceiling hike last November. Cutting 10 trillion dollars out of our deficit over 8 years got us a downgrade...remember? All the rhetoric that led to the downgrade was based on a projected 6% sustained GDP growth figure. Just another pipedream drummed up by the ponzi marching band. 1.8 percent growth doesn't even buy us more bananas for the republic, however it certainly does buy a ticket for another ride at the amusement park on the downgrade train or two tickets to the performance of Timmay the dog performing in the Dog And Crony Show...

Fri, 03/09/2012 - 12:36 | Link to Comment SheepDog-One
SheepDog-One's picture

Golden Slacks new 'HFT' GDP love it! Dont glance another 5 minutes 'GDP volatility index' will pick back up and it will be back over 2%!

Fri, 03/09/2012 - 13:14 | Link to Comment JR
JR's picture

“The bursting bubble…the ballooning trade deficit…and the slowing U.S. economy have cracked the foundation of the dollar’s global power. The Great Era of Dollar Domination is over. And now a giant derivative disaster threatens to crack the foundations of the American economy.” – John Pugsley, The Sovereign Society, 2005

Fri, 03/09/2012 - 13:53 | Link to Comment Frank N. Beans
Frank N. Beans's picture

i predict that goldman will make more predictions, and that Tyler will let us know about them.

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