May 14, 2014

Psst! Don’t Tell Anyone, But That 1Q14 GDP Contraction Is Looking Larger

Filed under: Economy — Tom @ 12:48 am

From the Wall Street Journal on Tuesday, sure to be ignored as much as possible by the rest of the press:

U.S. Economy Contracted In First Quarter, Latest Figures Show

… Based on more up-to-date figures, including the March trade data released last week, private forecasters now expect gross domestic product contracted in the first quarter for the first time in three years.

The latest evidence came Tuesday, when the Commerce Department released reports on retail sales and business inventories. Retail sales in February and March were revised up, but business inventories grew less in March than the agency had assumed in its GDP calculations.

Incorporating the new data, J.P. Morgan Chase on Tuesday estimated GDP contracted at a 0.8% rate in the first quarter. Macroeconomic Advisers put the contraction at 0.7%. Barclays Capital predicted a 0.6% decline. Pierpont Securities estimated output fell at a 0.4% rate. Action Economics estimated a 0.2% decline.

If this kind of bad news keeps pouring in, an annualized -1.0% isn’t out of the question.



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