We suggested that Goldman would trim its Q2 forecast following the abysmal Factory orders number earlier. Sure enough, here it comes. To our surprise, however, the cut was on 0.1%. This can only mean that Hatzius has left more dry powder for further GDP cuts as more and more high frequency economic "misses" rise to the surface.
From Goldman:
MAIN POINTS:
1. Factory orders declined by 0.6% (month-over-month) in April, in contrast to consensus expectations for a small increase. The decline resulted primarily from a drop in the nominal value of petroleum orders/shipments due to lower oil prices. Durable goods orders were unchanged in April, and non-durable goods orders/shipments excluding petroleum products increased by 0.2%.
2. The report was a modest negative for our tracking estimate of Q2 GDP growth. In particular, growth in “core” durable goods shipments (nondefense capital goods ex-aircraft) was revised down. Non-durable goods inventories also increased less than we had anticipated. We therefore revised down our tracking estimate by one tenth to +2.0% (annualized).