Prior to the numbers being released first quarter, the talking heads all said it would be slight growth.
I’m betting on <2%, and I’m betting on the adjustments having it end up at .5% or so. I don’t see growth (gut feel), and I think ObamaCare is still causing a huge hesitancy.
My guess is the headline number on Wednesday will be +3.0% - ultimately revised down to +2.3%. The jobs numbers the last 3 months point to >3% growth.
Crazy Germans... ;-)
Deutsche Bank Strays From The Wall Street Heard And Predicts A Massive GDP Report
On Wednesday, the Bureau of Economic Analysis will release its first estimate of Q2 GDP.
The average economist on Wall Street is looking for 3.0% growth, after the 2.9% drop in Q1. Citi, Barclays, Nomura, Goldman Sachs, and UBS are among the big names forecasting between 2.9% and 3.1% growth.
Deutsche Bank’s Joe LaVorgna is sticking his neck out, predicting the figure will come in at 4.2%.
In a new note, the LaVorgna explains why there’s a good chance that estimate will prove low: it assumes a conservative rate of productivity.
Productivity is defined as GDP over hours worked. Recent data suggests Q2 hours climbed at a 3.8% annualized rate. Assuming a 4.2% GDP rate, we get productivity growth of 0.4%. But major declines in productivity are often followed by a snapback the following quarter. And data show productivity fell 5.8% in Q1. That could yet be revised even lower.