Goldman, Atlanta Fed Slash Q1 GDP Forecasts Below 2.0%

From its exuberant 5.4% expectation for Q1 GDP at the start of February, The Atlanta Fed's guess has collapsed to just 1.9% as CPI and retail sales disappointments weigh on their outlook.

Via Atlanta Fed,

Latest forecast: 1.9 percent — March 14, 2018

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2018 is 1.9 percent on March 14, down from 2.5 percent on March 9. After yesterday's Consumer Price Index release from the U.S. Bureau of Labor Statistics and this morning's retail sales report from the U.S. Census Bureau, the nowcast of first-quarter real personal consumption expenditures growth fell from 2.2 percent to 1.4 percent.

GDPNOW is now well below consensus expectations...

Which is not entirely unexpected as we have seen this pattern of disappointment for the last 8 quarters...

And the weakness in recent US macro data suggests no rebound anytime soon...

But it's not just The Atlanta Fed, Goldman has taken an ax to its forecast also:

Today’s retail sales report was below even our own tempered expectations and followed similar weakness in January.

We estimate that the February tax refund delays were larger in magnitude than the tax cuts boosting consumer paychecks. As these refunds arrive in consumer bank accounts this month, the combined fiscal impulse swings to a clear positive, and we expect March retail spending to pick up significantly as a result.

Nonetheless, this potential improvement may arrive too late to prevent a significant deceleration in quarterly consumption growth (following +3.8% in Q4).

Accordingly, we lowered our Q1 GDP tracking estimate by two tenths to +1.8% (qoq ar).

And this is the declining economic growth picture that The Fed is jawboning 5 rate-hikes into?


Justin Case HopefulCynical Wed, 03/14/2018 - 11:47 Permalink

The Federal Reserve System is considered to be an independent central bank. It is so, however, only in the sense that its decisions do not have to be ratified by the President or anyone else in the executive branch of the government. The entire System is subject to oversight by the U.S. Congress….the Federal Reserve must work within the framework of the overall objectives of economic and financial policy established by the government.

In reply to by HopefulCynical

TeethVillage88s Countrybunkererd Wed, 03/14/2018 - 11:25 Permalink

Let's all sing "God Save the Queen" in honor of great traditions from England, and profound Central Bank Expertise and Economic Policy, Regulation, and Stewardship of the Taxbase and GBP & USD.…

- Just listen to your Corporate Leaders, Lobbyist, Lawyers, Bankers, Politicians... we'll be just like Great Britain, a golden age, unicorns puking rainbows, utopia,... just keep the MIC Big and Active overseas to bring democracy

In reply to by Countrybunkererd

gdpetti Countrybunkererd Wed, 03/14/2018 - 11:42 Permalink

Well, today's session in parliament seems like a pathetic attempt by psycho actors to put on a Monty Python skit... totally pathetic psycho show... but an excellent lesson in reality for the rest of the world... with the internet and global satellite, cable etc.. the whole world can see the truth of how pathetic our 'democracies' have always been... but not seen much of until fairly recently, as in the past, no one watched C-Span or BBC coverage of the idiot show... but now the puppets in congress/parliament are trying to force their propaganda on us by being as pathetic as possible... they seem to think they are actually 'serious', without knowing they are merely outing themselves as complete syncophants, psychopathic self loving pedophiles that don't seem to notice how stupid they are making themselves look...

Are they trying to secure more votes in Russia for Putin? Pointing out to the world, 'See, you too could have this!'

As for these numbers... didn't we all expect this? Isn't this the same BS as the BLS inflation numbers or those Oil numbers et al? Just part of the fake 'news' to pump and dump the market?

In reply to by Countrybunkererd

TeethVillage88s Countrybunkererd Wed, 03/14/2018 - 11:44 Permalink (Anarchy in the UK)


She was a girl from Birmingham
She just had an abortion
She was a case of insanity
Her name was Pauline she lived in a tree
She was a no one who killed her baby
She sent the letters from the country
She was an animal
She was a bloody disgrace
I’m not an animal
I’m not an animal



In reply to by Countrybunkererd

Endgame Napoleon Countrybunkererd Wed, 03/14/2018 - 13:22 Permalink

It reminds me that, if I were working, my Costco-membership-sized tax cut would inspire $0.00 in extra spending, as I struggled to cover rent that eats up over half of my earned-only income as a single, non-womb-productive, non-welfare-eligible woman with no spousal income.

I would be coming to work every day, staying the whiole day and meeting the account generation / retention quotas every month. I would be listening to many frequently absentee and non-quota-meeting moms, with either welfare-financed rent or spousal-financed rent, boast about their refundable child-tax-credit welfare infusion of up to $6,444 or a few thousand in the case of the non-refundable child tax credit, telling those of us getting the $40 tax cut all about the selfish, mom-pampering treats—completely unrelated to baby—that those child tax credits will be spend on:

  • beach trips to copulate with boyfriends (refundable child tax credit);
  • $800 tattoos (refundable child tax credit);
  • master bedroom furniture at Ashley (refundable child tax credit);
  • their ninth, excused, week-long visit to a bed & breakfast with their husband (non-refundable child tax credit);
  • kitchen redos (non-refundable child tax credit) and
  • spa retreats for busy-working / busy-babyvacationing moms (non-refundable child tax credit).

I also think of women in other situations who do not benefit, and in fact are hurt, by these pandering social-engineering projects, stealthy monetary policy maneuvers or whatever they are—elites using the tax code to reward some citizens for their lifestyle choices, while others get no tax welfare, but suffer from those same lifestyle choices.

I think of an elderly Black woman, one of my insurance customers, trying to live on a low SS retirement check. The average SSA check is only around $1,300 per month. She won’t get a “boost” from that pay-for-sex-and-reproduction child tax credit, but her daughter will, even though the grandma raises her child for her now that he is not a cute-and-cuddly baby for mommy to show off, but a rebellious teenaged boy. The grandma does the hard childrearing work; the mom gets the pay-per-birth tax welfare.

This Lady was paying her grandson’s insurance, working two jobs to do it due to her less-than-stellar retirement—one being an awful job, where she had do a lot of grimy and pretty athletic work for someone in her age group in a building that can only be described as dangerous. 

Guess what virtue signalers: One of my colleagues, a person in a different minority group, was so rude to her due to the product category that she was in.....or due to something else.....that she asked if I, the white girl, would take her payment from then on. The “racism” scene—like the “working families” welfare scene and the working-moms scene, in general—is not quite as sold by the identity politics peddlers. 

All economists ever think about when talking about these lopsided stimulus measures is the macro effect on the financial system, not the fairness issues at the micro level, and all the politicians ever try to do is to figure out how much pander value they can get from giving out X tax dollars to this oh-so-worthy group over that less-worthy group. 


In reply to by Countrybunkererd

P.K.Snosage Wed, 03/14/2018 - 11:24 Permalink

Hey, but just over a month ago, Jeffrey Gundlach, the chief executive of DoubleLine Capital, said “it is hard to love bonds at even 3 percent” yield, given the backdrop for accelerating economic growth in the U.S." And he was being hailed as a prophet.

Last of the Mi… Wed, 03/14/2018 - 11:26 Permalink

Suspicious! Never take Fed-speak at it's defined word. Sounds like they're about to do a little main lining QE one more time for the old times. Maybe call it falling off the wagon once in the long road to recovery that is the most serious addiction facing America today. Banker addiction to free money that devalues every cent in your pocket every day until someone screams or takes up arms. THAT, my friends, is the true opioid epidemic that is an existential threat to America and our way of life.

TeethVillage88s Last of the Mi… Wed, 03/14/2018 - 11:36 Permalink

Reminds of this:

"Nassim Nicholas Taleb... the Lebanese-American thinker, their shared sin is that (with some exceptions) they lack “skin in the game”. By this, Taleb means they are insulated from the consequences of their actions: they do not have “a share of the harm” or “pay a penalty if something goes wrong”. This “asymmetry in risk bearing”, he warns, leads to “imbalances”, “black swans” (the rare but high-impact events described in his 2007 mega-seller) and “potentially, to systemic ruin”.…

In reply to by Last of the Mi…

TeethVillage88s Bam_Man Wed, 03/14/2018 - 11:55 Permalink

Indiv Tax Receipts = $1.6 Trill, Other Taxes Fees = $300 B, Corporate Tax $300 B (Still below 2006) for FY 2017. 

- So Budget is $4 Trillion with Soc Sec & Medicare/Medicaid which have Receipts of their own.  My Rule of thumb was $1 Trillion Deficit, but the Liabilities don't make sense and they even raised the budget while causing doubt about whether we really get all of those individual Tax Receipts at that level.

- Of course Black Budget and Stolen Funding is not really reported

In reply to by Bam_Man

Pollygotacracker Wed, 03/14/2018 - 11:40 Permalink

When ordinary folks are dependent upon tax refunds or tax reductions to spend some of their income, you know how crappy their jobs really are. Thirty years ago you would never hear that people were so dead broke. End the Fed. 

TeethVillage88s Herdee Wed, 03/14/2018 - 12:23 Permalink

150 million working, 100 million not working buy working aged = 250 M people

100 / 250 = 40%
Civilian Labor Force Participation Rate: 25 to 54 years (LNU01300060) 82.0 Percent, Not Seasonally Adjusted, Oct 6, 2017
Not in Labor Force (LNU05000000) 94,513 Thousands of Persons, Not Seasonally Adjusted, Oct 11, 2017

In reply to by Herdee

devo Wed, 03/14/2018 - 12:40 Permalink

When 60% of income goes to housing and tax cuts are enacted to benefit the rich you're not going to get any growth. It's really simple.