Between today's record high Italian unemployment, and the just announced Goldman slashing of its Q4 GDP forecast from a 3.0% standing estimate to a 2.2% tracking forecast, one can easily see why the S&P is going to hit 2050 early next week..
From Goldman Jan Hatzius:
BOTTOM LINE: Personal spending grew less than expected in September, and personal income also grew a bit less than expected. The core PCE price index rose at a subdued rate, in line with expectations. Separately, the employment cost index rose more than expected in Q3, pointing to slightly faster growth in compensation expenses. We began our Q4 GDP tracking estimate at +2.2%.
Personal income grew 0.2% (vs. consensus +0.3%) in September. Personal spending fell 0.2% (vs. consensus +0.1%), in part as a result of a decline in motor vehicle and parts sales (-5.3%). As a result of income growing more quickly than spending, the saving rate moved up two-tenths to 5.6%.
We start our Q4 GDP tracking estimate at +2.2%, eight-tenths below our prior standing forecast. The lower tracking estimate mainly reflects the larger-than-expected +0.7 percentage point contribution from defense spending to Q3 growth (which introduces risks for payback in Q4), the weaker-than-expected trajectory for consumer spending heading into the quarter apparent in today’s personal income and outlays report for September, and a slightly weaker assumption on net exports in light of the large net trade contribution in Q3, our global teams’ recent downgrades to rest-of-world growth forecasts and the recent appreciation of the US dollar.