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Goldman Lowers Q1 GDP Forecast To 2.0% From 2.3% On Weaker Consumer Data

Submitted by Tyler Durden on 03/01/2012 10:33 -0400

As already noted, consumer data this morning came in surprisingly weak, always a harbinger of GDP decline. Sure enough, here is Goldman with the first downward GDP revision in the aftermath.

Spending and income data weaker than expected for January. We revised down our Q1 GDP tracking estimate to 2.0% from 2.3% previously

POINTS:

Personal income and spending were both weaker than anticipated in January. Nominal consumer spending increased by 0.2% (month-over-month), below consensus expectations for a 0.4% gain. In real terms, consumer spending was flat—and in fact the level of consumer spending has held unchanged for three consecutive months. About 0.1 percentage point of the weakness in real consumption growth resulted from a decline in heating and energy services, which likely reflects warmer-than-normal weather in January (though warm weather may have helped boost spending on other items, so the net effect is unclear). Nominal personal income increased by 0.3%, slightly below consensus expectations for a 0.4% increase. Real disposable personal income—which is adjusted for taxes and inflation—declined by 0.1%, and is up just 0.6% from a year earlier.

Given weaker-than-expected consumer spending results, we revised down our tracking estimate of Q1 GDP growth to 2.0% (annualized) from 2.3% previously. Construction spending data and vehicle sales reported later today could also affect our tracking estimate

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Thu, 03/01/2012 - 10:39 | 2212367 scatterbrains

and once again as TLT drops UGA spikes.. great for consumption.. keep pumping bitchez

Thu, 03/01/2012 - 10:39 | 2212368 Hippocratic Oaf

Mkts. up

GDP down

Nothing makes sense

Thu, 03/01/2012 - 10:41 | 2212374 Caviar Emptor

Oh it makes sense: Goldman says GDP estimate down is like screaming "Hey Bennie! Send down those moneybags fast!"

Thu, 03/01/2012 - 10:43 | 2212384 SheepDog-One

Problem with that is even Benny sees $7 gas is a BIT problematic.

Thu, 03/01/2012 - 10:48 | 2212404 Caviar Emptor

Yup, sheepie, he's kinda stuck!

Thu, 03/01/2012 - 10:55 | 2212438 tarsubil

Does anyone know how much gas our military wastes dismembering villagers in Timbuktu?

Thu, 03/01/2012 - 10:41 | 2212375 The Swedish Chef

You look in the wrong place for correlation. LTRO2 came in higher than LTRO1, no CDS trigger on Greek bonds, markets up. THERE is your correlation, like it or not.

Thu, 03/01/2012 - 10:47 | 2212400 SheepDog-One

Greece was always just a diversion, not even near the bankruptcy of just California. Everyone dont get too complacent out there, thats just the effect theyre looking for. Theyll take it all away one of these mornings.

Thu, 03/01/2012 - 10:42 | 2212379 SDRII

1984

Thu, 03/01/2012 - 10:45 | 2212391 SheepDog-One

I always figured it would be WAY better than 1984 called it....hell wheres the public hangins? And those mandatory gatherings to watch propaganda speeches, great place to meet chicks....where are THOSE!

Thu, 03/01/2012 - 10:43 | 2212380 BeetleBailey

akin to the first half of 2000, when tech companies lost money by the dump truck, but stocks kept flying up......

Thu, 03/01/2012 - 10:45 | 2212392 Christoph830

This is the pump up before Bernanke speaks, then there will be a sell-off.

Thu, 03/01/2012 - 10:53 | 2212426 Moneyswirth

Our equity markets no longer have a rational correlation with economic realities. It's all about liquidity, has been for several years.

Thu, 03/01/2012 - 10:40 | 2212371 4realmoney

RON PAUL QUESTIONS HILARY CLINTON - VERY INTERESTING

http://djia.tv/ron-paul/ron-pauls-tough-questions-for-hillary-clinton/

Thu, 03/01/2012 - 10:42 | 2212378 SheepDog-One

Here America....have some more Zoloft! Drink up the yummy sodium flouride too! Its ALL GOOD! Snookie FTW!

Thu, 03/01/2012 - 10:53 | 2212424 Hippocratic Oaf

PoP your pills and KEEP ON TRADIN'........works for me.

Thu, 03/01/2012 - 10:43 | 2212382 Dick Darlington

But we have CONsumer comfort and ISM diffusion index coming today. Both will naturally blow out through the roof and equities will follow. Real world doesn't matter, only massaged diffusion indices and CONsumer comfort and the likes matter. All abt "better than expected". Can't wait to hear abt the great decoupling story from the msm. Fookin LOL!

Thu, 03/01/2012 - 10:46 | 2212393 youngman

Hey but Greece is kicking ass.........and I suppose all those bankers selling CDS´s are busy today selling more.....chirp..chirp..chirp...

Thu, 03/01/2012 - 10:59 | 2212455 Moneyswirth

Yes. Road to recovery. 1000% yield on Greek paper. Hurry hurry hurry. This offer won't last long.

Thu, 03/01/2012 - 10:46 | 2212396 Undecided

http://www.bloomberg.com/news/2012-03-01/dark-pools-capture-record-share-of-declining-u-s-equity-volume.html

Dark Pools

Thu, 03/01/2012 - 10:49 | 2212408 Caviar Emptor

Keepin the game dark is like having a side bet going at the poker table. Wink wink.

Thu, 03/01/2012 - 10:48 | 2212407 SheepDog-One

All yesterdays losses erased upon open, and an extra nice cushion to boot! LOL what a bunch of bullshit hey you guys can have it, enjoy.

Thu, 03/01/2012 - 10:50 | 2212414 Caviar Emptor

Said it before, market is a proxy for monetary expansion, nothing more nothing less.

Thu, 03/01/2012 - 10:49 | 2212411 SimpleandConfused

Again I am confused. Consumer is weak? Not according to the impartial, Huffington Post affiliated, DNC operated (sarcasm riddled here I hope that is clear), Buiness Insider:

February Retail Sales Are SMASHING Expectations, Target Stores Up 7.0%

Thu, 03/01/2012 - 10:49 | 2212413 agNau