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 | 2239631 SolidSnake961
SolidSnake961's picture

next up will be JPM

Fri, 03/09/2012 - 12:28 | 2239832 malek
malek's picture

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

Fri, 03/09/2012 - 11:41 | 2239632 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 | 2239636 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 | 2239637 LongSoupLine
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bullish...algo's creating green cliff face candles.  Entire sell-off is now gone.  unreal...

Fri, 03/09/2012 - 11:48 | 2239658 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 | 2239683 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 | 2239872 SheepDog-One
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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 | 2239638 slewie the pi-rat
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Fri, 03/09/2012 - 11:44 | 2239643 ZippyBananaPants
ZippyBananaPants's picture

aint thet the tird time this mont?

Fri, 03/09/2012 - 11:44 | 2239646 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 | 2239654 battle axe
battle axe's picture

Employment BS numbers.

Fri, 03/09/2012 - 11:53 | 2239679 Moneyswirth
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There is no stock "market".  This is not a market in the classical sense anymore. 

Fri, 03/09/2012 - 12:35 | 2239862 SheepDog-One
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'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 | 2239652 SimpleandConfused
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It is always simple with ZIRP.  The news "no matter":  BTFD

Fri, 03/09/2012 - 11:47 | 2239657 Benjamin Glutton
Benjamin Glutton's picture

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

Fri, 03/09/2012 - 11:50 | 2239668 resurger
resurger's picture

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

Fri, 03/09/2012 - 11:51 | 2239671 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 | 2239769 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 | 2239789 surf0766
surf0766's picture

All related to hedonics at some point. Manipulation

Fri, 03/09/2012 - 12:33 | 2239858 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 | 2239790 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 | 2239850 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 | 2240037 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 | 2240234 Frank N. Beans
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i predict that goldman will make more predictions, and that Tyler will let us know about them.

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