Goldman Sachs cuts GDP tracking estimate

Goldman Sachs is out with a note taking down its Q1 GDP tracker to 2.5% from 2.9%. They also lowered the Q4 tracker to 3.2% from 3.5% due to economic revisions.

Here's what they had to say:

Industrial production decreased by 0.1% in January and manufacturing production decreased by 0.5%, both below expectations. The NAHB housing market index increased in February, above consensus expectations for a smaller increase. Business inventories increased in December, directly in line with consensus expectations, and the November growth rate was unchanged. Utilities production rose sharply reflecting severe cold weather, implying a boost to utilities consumption that will offset some of the retail spending weakness. We lowered our Q1 GDP tracking estimate by 0.4pp to +2.5% (qoq ar) and lowered our past-quarter GDP tracking for Q4 by 0.3pp to +3.2%, compared to +3.3% as previously reported. Our domestic final sales forecast for Q1 stands at +2.8% (qoq ar).

We should get an update on the Atlanta Fed GDPNow tracker soon but note that it's still very early in Q1 economic data.

The comment on utilities utilization is an interesting going forward because after the short blast of cold in January, it's been a very warm winter so that should reverse in February, adding more downward pressure.