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Goldman's Hatzius slashes Q4 GDP forecast amid shutdown

  • Thus far, the shutdown has trimmed 0.3% from Q4 GDP growth thanks to federal employee furloughs, reckons Goldman's Jan Hatzius, but the effect would be reversed in 2014 Q1 (assuming the shutdown ends). He adds another 0.2% decrease in growth thanks to the rise in uncertainty to come up with a downside risk of about 0.5% to his 2.5% Q4 GDP growth forecast.
  • Hatzius' note came out before the wrinkle of Democrats demanding the end of the sequester (automatic budget cuts) be part of any deal.
  • Thus far the shutdown - and apparent slower growth - has been of little benefit to long-term Treasury futures. They've been locked in a range surrounding 2.64% for weeks, and last week broke higher to 2.69%. The government bond market is closed today due to Columbus Day, but Treasury futures are marginally higher.
  • TLH, TLT, IEF, DTYL, DLBL, ILTB, TENZ, ITE, TLO, EDV, VGIT, VGLT, TMF, TYD, LBND, UBT, UST, TMV, TYO, SBND, PST, TBT, DTYS, DLBS, TBF, TTT, TYNS, TYBS, TBX.
Comments (6)
  • DeepValueLover
    , contributor
    Comments (8134) | Send Message
     
    The taxpayer money that is NOT being sent to Washington due to the PARTIAL (17%) shutdown is being utilized in the private economy thus no "slowdown" is taking place due to 17% of Feds being given a delayed paid vacation.
    14 Oct 2013, 10:18 AM Reply Like
  • bbro
    , contributor
    Comments (9301) | Send Message
     
    Merrill Lynch 4th qtr GDP was 16.954... it has now been marked down to 16.917
    14 Oct 2013, 10:56 AM Reply Like
  • Tack
    , contributor
    Comments (12695) | Send Message
     
    Yeah, "slashing!" Oh, the humanity!
    14 Oct 2013, 11:43 AM Reply Like
  • YONSU
    , contributor
    Comments (161) | Send Message
     
    GDP growth has not be above 4.9 since 1st quarter 2012, don't know what 16.954 is but it is not GDP growth in the U.S,
    14 Oct 2013, 12:43 PM Reply Like
  • june1234
    , contributor
    Comments (2492) | Send Message
     
    Merrill went broke few yrs ago. Maybe there's a connection.Then again if your'e going to make it up just go for it
    14 Oct 2013, 12:47 PM Reply Like
  • erbrown
    , contributor
    Comments (2) | Send Message
     
    What impact did the~ $32 Billion in new OBAMACARE taxes have on economic growth???
    14 Oct 2013, 11:39 AM Reply Like
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