1st revision of 2Q GDP comes out tomorrow. Consensus estimate is 3.9% (vs 4.0% advance estimate).
Met with an economist from IHS today and they have it at 4.3%.
Stone McCarthy estimates 3.6% in a client note today:
“We expect the second estimate for real GDP growth in Q2 2014 to be revised lower to +3.6% SAAR from the originally reported gain of 4.0% in the advance release. Since the Advance Q2-14 estimate was reported on July 30, the subsequent trade data were better than the BEA’s assumptions used to construct Q2 real GDP, but the inventories data fell short.
Here we look at the impact of the inventories data that has been reported since the Advance estimate for the Q2-14 revision. Inventories contributed 1.66% to GDP data as per the Advance estimate. But, since then, reported inventories for manufacturing, wholesale and retail industries all came in below the BEA’s forecasts and suggest that the inventory contribution in Q2 will be smaller in the second estimate.”
IOW, the CBO is wrong?
The critical print is going to be this quarter. How much of Q2 is Q1 pushed forward? 0% plus 4% averages out to an anemic 2% a year (better than zero or negative like some countries I could name).
If Q3 is 4% or better then we’re in good shape.