Back in 2014, Goldman's Jan Hatzius was proud to announce he anticipated the US economy growing solidly in 2015, at a so-called "above consensus" pace, somewhere in the 3%-3.5% range. Then, a few months ago, the same Goldman strategist unabashedly declared that the US economy would grow by 3% in Q1.
Then... it snowed, leading to the worst economic contraction for the US economy since, well, last winter. It snowed then too, but nobody could possibly anticipate it snowing two years in a row.
And, earlier today, after the BEA's latest report that US consumer failed to spend as much as expected for yet another month (meaning spending contracted during both the gas price-plunge phase and the subsequent rebound), Goldman came out with this.
- As a result of the weaker-than-expected spending numbers, we reduced our Q1 GDP tracking estimate by two-tenths to +1.2%.
Not surprising: we said as much would happen a month ago when we first reported that much to the shock of the world, the Atlanta Fed itself was expecting a 1.2% GDP growth in Q1. Since then, the Atlanta Fed has crushed its own forecast and now expects only 0.2% growth.
Which probably explains why Goldman "accidentally" suffered an excel fat finger, and moments ago Hatzius' subordinate, David Mericle, was trotted out to advise Goldman's clients that the firm had a glitch with its earlier GDP forecast, and what it meant to revise Q1 GDP to was 33% lower, not from 1.2% but 0.8% (down from 1.4% previously, and down from 3.0% two months ago).
We made an error in our original estimate of the GDP tracking implications of the February PCE report. We have now reduced our Q1 GDP tracking estimate to +0.8%. We regret the mistake.
Or, just like last year!
How one can "mistake" a GDP estimate by 33% based on a personal spending number missing consensus and Goldman estimates by a tiny 0.1% is unclear but is also irrelevant. What is abundantly clear is that nobody at Goldman, the Fed, or anywhere else, has any idea how to estimate economic growth in a world in which all the data is fabricated and goalseeked, and where not one but two "harsh winters" in a row can subtract over $100 billion in trendline economic growth.