Remember the data-dependent recovery, which until the NFP report two weeks ago, could seemingly do no wrong. Well, according to Goldman the recovery party just ended.
From Goldman’s Kris Dawsey:
BOTTOM LINE: Business inventories rose less than expected in August. In light of the disappointing September retail sales report and slower-than-expected inventory growth in August, we reduced our Q3 GDP tracking estimate by three-tenths to +3.2%. We also moved our Q4 GDP forecast down a quarter point to +3.0%.
MAIN POINTS:
1. Business inventories rose 0.2% in August (vs. consensus +0.4%). Retail inventories—the only component of the report not already known for the month—declined 0.3%. Auto and auto parts inventories declined 0.7%, while ex-autos inventories were flat.
2. In light of the disappointing September retail sales report and slower-than-expected inventory growth in August, we reduced our Q3 GDP tracking estimate by three-tenths to +3.2%. We also moved our Q4 GDP forecast down a quarter point to +3.0%, due to weaker momentum in consumer spending heading into the quarter.
So is this just the “bad news is good news” that the algos were looking for?
via Zero Hedge http://ift.tt/1ttGWf1 Tyler Durden