Huh? Moody’s Knocks 2Q15 Growth Estimate Down to 0.6 Percent, But ‘Our View of the Economy Hasn’t Changed’
Mark Zandi’s collection of rose-colored optimists at Moody’s just trashed the second quarter, but insist that we should be in “don’t worry, be happy” mode:
… The March trade deficit took a heavy toll on our second quarter GDP estimate, falling from 3% to 0.6% at an annual rate. Our model now expects further widening in the trade deficit and less inventory build. We don’t make any adjustments to the model and this is an eye-popping decline. However, we anticipate significantly more volatility in our tracking estimate this quarter than usual and our view of the economy hasn’t changed.
You have to wonder what it would take for Team Zandi to have a different “view of the economy.”
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UPDATE: The Atlanta Fed reacted to today’s trade news by keeping its 2Q15 estimate at an annualized 0.8 percent. All I can figure is that, unlike everyone else, they had today’s news already baked in. (Or is Moody’s playing possum with its forecast to get everyone excited when its now-awful number heads upward?
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UPDATE 2, 4:10 P.M.: CNBC is now reporting a consensus -0.3 percent on the 1Q15 and 2.9 percent for 2Q15 (HT to commenter Al the Plumber).
[...] trade report, knocked down their second-quarter growth projection from an annualized 3.0 percent to a paltry 0.6 percent. However, showing that old habits are hard to break, Moody’s also insisted that “our [...]
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