US OUTLOOK/OPINION: Retail Sales, Inventories Data Weigh On Q1 GDPNow
Feb-14 16:43
The Atlanta Fed's GDPNow estimate for Q1 growth has dropped 0.6pp vs the prior day's estimate, to 2.3% Q/Q SAAR after today's data. The soft January retail sales figure captured the most attention, and it dragged down the nowcast for real personal consumption expenditure to 2.3% from 2.8% previously.
- But the weaker business inventories figure (-0.2% Dec vs +0.1% prior, -0.1% expected) and energy investment within the industrial production release (in addition to soft building materials and appliance retail sales) also weighed on the real gross private domestic investment growth forecast, which dropped to 4.9% from 6.2% prior.
- PCE's now seen contributing 1.5pp to GDP (1.9pp prior), with inventories 0.4pp (0.6pp prior) and nonresidential / residential investment seen a little weaker (0.05pp less positive contribution).
- The 2.3% reading is the lowest yet for GDP now and would be equal to Q4's growth rate - a PCE growth figure of 2.3% Q/Q per the nowcast would mark a sharp drop from 4.2% prior and 3.7% in Q3 2024.
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