Courtesy of Mish.
In the wake of a 6th consecutive decline in business spending GDP Growth Estimates Tumble, Again.
- The Federal Reserve Bank of Atlanta on Wednesday put its gauge at 0.2%, down from its earlier estimate of 0.3%.
- Morgan Stanley economists lowered their estimate for first-quarter growth to an annualized 0.9% from an earlier forecast of 1.2%, pointing to light inventories and lower capital goods exports as weighing on GDP.
- Economists at Barclays lowered their projection a tenth of a percentage point to 1.2%.
- The forecasting firm Macroeconomic Advisers also trimmed its estimate down to 1.2% from 1.5% before Wednesday. Barclays and Macroeconomic Advisers cited, among other factors, worries that the drop in shipments last month foretells a decline in first-quarter equipment investment.
- J.P. Morgan Chase economists lowered their first-quarter forecast to an annualized 1.5%, from 2%, saying a decline in investment by oil companies — the result of the plunge in oil prices — could offset the lift from higher consumer spending.
Optimism Still Rules
Optimism is still the order of the day.
“Overall, given the usual noise in the data, as well as a melange of other special factors, we do not view the 1.5% [First-quarter] tracking as so far below the 2.4% average of the current expansion to raise more serious worries,” said J.P. Morgan chief U.S. economist Michael Feroli in a note to clients.
Speaking of optimism, Goldman Trims U.S. First Quarter GDP View to 1.8 Percent from 2.0 Percent.
“Goldman Sachs economist Kris Dawson said on Wednesday he scaled back his view of U.S. growth in the first quarter, following an unexpectedly weak report on domestic durable goods orders in February.“
Core Business Orders
Today we learned core business spending, defined as new nondefense capital goods orders excluding aircraft, declined for the sixth month.
Core business spending declined seven months at the beginning of 2012, but nearly all data other than jobs growth has been weak this go around.
The series is somewhat volatile as the following chart shows….
