‘Twas the night before THE GDP RELEASE, when all through the house
Not a creature was stirring, not even a mouse
Apparently the same applies to the US economy. The Atlanta Federal Reserve’s GDP NOW is forecasting a pathetic Q1 GDP read of 0.2 percent.
Here is the breakdown. From the beginning of February until today, Personal Consumption Expenditures (PCE) on Goods dropped severely. And Fixed Investment in Structures fell as well.
Meanwhile, the 10 year – 2 year yield curve slope is near the low since December 2007.
Let’s see what Friday’s GDP release brings. I forecast … a lump of coal.
I wonder if The Fed will still consider raising interest rates this year?
Alarm! Retail and food services sales declined -0.6 percent in February, the first threefer (three consecutive declines in retail sales) since 2012.
This threefer (-0.6, -0.8, -0.9) is worse than the 2012 threefer (-1.0, -0.1, -0.3) in terms of aggregate declines over a three month period. Hence, it is the biggest 3 month decline since The Fed’s intervention in late 2008. And The Great Recession!
The decline in retail sales adds credence to the Atlanta Fed’s Q1 GDP forecast of 1.2 percent.
Speaking of Credence …
The Atlanta Federal Reserve disturbed quite a few folks where it announced that Q1 Real GDP growth is forecast to be an abysmal 1.2 percent.
The Atlanta Fed provided a spreadsheet of the breakdown (or evolution) of the Q1 GDP forecast: GDPTrackingModelDataAndForecasts
What sticks out like a sore thumb is Fixed Investments: Structures.
It is indeed a Grim FINdango for the commercial real estate market.
Time to queue the ship’s band to play “Nearer My God To Thee” from the film “Titantic.”
The S&P 500 index has continued to climb over the past year as the World GDP Forecast YoY continues to sink (like The Titanic).
And now the Atlanta Fed has joined the Titanic band and is playing a mournful tune of … Q1 2015 Real GDP growth of 1.2 percent.
And up on Constitution Avenue, The Federal Reserve swings into action!
Fortunately, Central Banks have flooded the globe with liquidity.
Maybe the Hindenburg Omen should be renamed The Titanic Omen!
“Lookout, do you see any icebergs ahead in this tranquil sea of liquidity?” “No Captain Yellen. Ocean is as still as a mill pond.”
Well, ain’t that a kick in the head.
Q4 GDP rose at a 2.2 percent rate, a downward adjustment from the preliminary estimate of 2.6 percent.
Notice how GDP growth have been declining since 1950 (16.9 percent QoQ) to Q4 2013 (2.2 percent QoQ). Now QoQ GDP growth is down 60 percent from Q3 to Q4 2014.
As the Edison Lighthouse once sang (sort of ), growth slows where my government grows.
Personal consumption expenditures grew at 4.2 percent QoQ, tying the highest rate since The Fed began their massive intervention.
Here is the breakdown of the Q4 GDP numbers.
What did Americans spend their money on? HEALTHCARE! (I am using a chart from Zero Hedge since I have to head to the hospital for my knee arthroscopy.
Let’s see if The Federal Reserve and Janet Yellen have any tricks up their sleeves in their Little Green Bag.