Summary: Trump fantasy persists in the face of weakening economic data, health care and tax reform uncertainty. The reality is that the damage done to the economy will not right itself just because Trump has been elected and we are in for a wild ride whether or not President Trump decides to do the right thing for the American economy.
- It didn’t take long for the Atlanta Fed to already reduce its inflated Q2 GDP forecast
- Remember, they initially came out with their first estimate of 4.3% growth in the second quarter
- Following the dismal .7% that was initially released for Q1
- My guess is, still, that they will continue lowering that estimate as more economic data comes in
- Nonetheless, the Atlanta Fed boldly came out with 4.3% for Q2
- Already, earlier this week, they have reduced that estimate to 3.6%
- That was their first downward revision; I think it is going to be the first of many
- We did this exact same dance last quarter
- Where the Atlanta Fed starts high and as more and more weaker data comes in they keep notching down the estimate
- It’s like a GDP forecasting limbo
- The question is:”How low can the bar go?”
- Remember, I mentioned on my last video blog that the New York Fed is already down to 1.8% for Q2, so the Atlanta Fed has a long way to go to catch up to the New York Fed’s estimate
- Friday will bring the next update to the GDP estimate
- And that’s when we will get the retail sales numbers
- My guess is that we will continue the trend and those sales will be less than expected
- We already got some news today that should weigh on Q2 GDP and that is Import/Export Prices for the month of April
- This is important because obviously what we pay for our imports and what we get for our exports will be a big determinate of the trade deficit
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