Goldman Lowers Q2 GDP Forecast One Day After Raising It

Tyler Durden's picture


High frequency economics is truly living up to its name, as now GDP forecasts are adjusted not weekly but daily. After Goldman yesterday hiked its Q2 GDP forecast to 1.7% on better than expected Q1 GDP composition, today's weak consumer spending data pushed it right back down.

From Goldman:

Soft Consumer Spending:


BOTTOM LINE: Consumer spending was unchanged in May and earlier months revised down. Q2 GDP now tracking +1.6%. Core PCE inflation lower than expected for the month.


1.    Nominal personal consumption expenditures (PCE) were unchanged in May. Real PCE was up 0.1% (month-over-month). Although results for May were close to consensus expectations, earlier months were revised lower. In particular, monthly growth in real PCE for both March and April was revised down by 0.2 percentage points. Due to the downward revisions to March and April PCE, we revised down our estimate for Q2 PCE to +1.8% (annualized) from +2.0% previously. This lowered our tracking estimate of Q2 GDP growth to +1.6% from +1.7%.


2.    Nominal personal income increased by 0.2% in May, as expected. Real disposable income increased by 0.3%, and has accelerated modestly to +1.1% year-over-year (from a low of +0.2% yoy in February). The PCE price index declined by 0.2%, as expected. The core PCE price index increased by +0.12%, less than the consensus had forecast. However, because of upward revisions to earlier months, the year-over-year growth rate in the core PCE price index was in line with the consensus expectation at +1.8%.

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Fri, 06/29/2012 - 09:07 | 2572878 Christoph830
Christoph830's picture

Once a QE fiend, always a QE fiend...

Fri, 06/29/2012 - 09:12 | 2572903 GetZeeGold
GetZeeGold's picture



Blankfein is a pretty pretty girl and it's a womans prerogative to change her mind.


Fri, 06/29/2012 - 09:13 | 2572908 battle axe
battle axe's picture

The bitch needs a beaten....

Fri, 06/29/2012 - 09:18 | 2572912 bdc63
bdc63's picture

"God's work" sure can appear confusing from the perspective of us muppets ...

Fri, 06/29/2012 - 09:08 | 2572880 firstdivision
firstdivision's picture

...and the USD falls while the EUR rises due to.....hmmm no new printing by the Fed....are they going to print dollars in the EZ now?

LOL at WTI up +5% already.

Fri, 06/29/2012 - 09:12 | 2572905 bdc63
bdc63's picture

... and gold up 45 bucks ...

Fri, 06/29/2012 - 09:40 | 2573019 dexter bland
dexter bland's picture

These days the consumer and business are also keyed in to these forecasts and adjust their behaviour rapidly to suit the prevailing economic mood. So shouldn't we also have an FOMC decision at least every second day to keep them in check/lift their spirits accordingly?

C'mon Ben I'm freakin bored of this Euro shit I don't even know where that place is. Can't wanna wait another month need some of that soothing Fed speak to help me sleep for an "extended period".

Fri, 06/29/2012 - 09:09 | 2572890 t_kAyk
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Peter Madoff, the younger brother of Ponzi scheme mastermind Bernard Madoff, was arrested at his lawyer's Manhattan office today.

Fri, 06/29/2012 - 09:12 | 2572897 bdc63
bdc63's picture

and yet Corzine walks free ...

Fri, 06/29/2012 - 09:11 | 2572898 Christoph830
Christoph830's picture

And yet Jon Corzine is still walking the Earth as a free man.  What a world we live in.  

Fri, 06/29/2012 - 09:13 | 2572907 bdc63
bdc63's picture


Fri, 06/29/2012 - 09:09 | 2572891 Cognitive Dissonance
Cognitive Dissonance's picture

The system is coming apart at the seams.

Warp speed Mr. Sulu. Get us the hell out of here.

Fri, 06/29/2012 - 09:15 | 2572913 TheDarkKnight
TheDarkKnight's picture

Captain there seems to be a gravity well pulling us in, we are unable to jump to warp.


Activate emergency protocol Captain, everyone else to the lifeboats!

Fri, 06/29/2012 - 09:15 | 2572909 falak pema
falak pema's picture

OT/ Japan finds a huge deposit of rare earths that could secure its autonomy for 270+ years. Read this :


Japon: un important gisement de terres rares découvert dans le Pacifique

Down the road, China loses its key monopoly in this sector!

Fri, 06/29/2012 - 09:21 | 2572935 Clint Liquor
Clint Liquor's picture

For those who don't read French.

"Once a mining technique is developed to secure the minerals from the seabed, which is at a depth of 5,600 meters, Japan may be able to attain complete self-sufficiency in supplies of the mineral."

Fri, 06/29/2012 - 09:13 | 2572910 Doubleguns
Doubleguns's picture

Just pulling the muppet strings.

Fri, 06/29/2012 - 09:16 | 2572916 monopoly
monopoly's picture

This is all so absurd. Like a 3 ring circus where the clowns have no idea which ring they belong in. So we bail out again, and create more debt world wide that can NEVER be repaid. And this is bullish? Well for our gold, silver, miners it makes perfect sense, but are we going to buy more Burritos, flat panel TVs or a third I pad. Oh well. Just watch the inmates do their thing until they are put back in their restraining jackets.

Fri, 06/29/2012 - 09:17 | 2572921 Waterfallsparkles
Waterfallsparkles's picture

Looks like Goldman is on the wrong side of the Trade.  I believe they are really short the Market.

Fri, 06/29/2012 - 09:38 | 2573010 Bold Eagle
Bold Eagle's picture

Goldman's short S&P call was a signal for me to close my short position. It never fails.

Fri, 06/29/2012 - 09:20 | 2572931 WillyGroper
WillyGroper's picture

Thank heavens BA & AVAV are doing well.

Fri, 06/29/2012 - 09:31 | 2572981 sickofthepunx
sickofthepunx's picture if the anal-ists at GS didn't know this yesterday

Fri, 06/29/2012 - 09:41 | 2573020 Hype Alert
Hype Alert's picture

Didn't they make a call on the S&P a few days ago for 1285?

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