Trifecta: 1Q Productivity Decline Worsens in Revision, April Trade Deficit Expands, ADP Disappoints (Update: The 2Q GDP Estimate Writedowns Begin)
Nonfarm productivity in the frost-bitten US in Q1 plunged at its fastest pace since Q1 2008, with a 3.2% drop … Unit labor costs soared 5.7% – the most since Q4 2012.
Also at Zero Hedge: “Trade Deficit Soars To 2 Year High, To Slam Lofty Q2 GDP Expectations”
The U.S. monthly international trade deficit increased in April 2014 according to the U.S. Bureau of Economic Analysis and the U.S. Census Bureau. The deficit increased from $44.2 billion in March (revised) to $47.2 billion in April as exports decreased and imports increased. The previously published March deficit was $40.4 billion. The goods deficit increased $3.3 billion from March to $65.8 billion in April; the services surplus increased $0.2 billion from March to $18.6 billion in April.
The 10 percent worsening of March from $40.2 billion to $44.2 billion would seem to indicate that any final revision to first-quarter GDP will go further into contraction.
ADP’s private-sector payroll increase in April of 179,000 is worse than both terrible-weather February (198K) and pretty bad-weather March (215K).
And all of this this is supposed to lead to a 4% reading for 2nd quarter GDP?
UPDATE, 10:00 a.m.: At Zero Hedge, a quick answer to my question — “Goldman, BofA, Credit Suisse All Cut Q2 GDP Forecasts By 0.5% On Average.”:
Bank of America … cut its Q2 GDP forecast by 0.5% to 3.6% … Credit Suisse … by 1 whopping percentage point to 3.0%, and now heeeeere’s Goldman, which cuts not only its Q2 GDP forecast to 3.4% from 3.8%, but also the already abysmal Q1 GDP to worse than -1%.