US: Q1 GDP tracking estimate lowered by 0.6pp to 0.2% from 0.8% - Nomura

The research team at Nomura has lowered their Q1 GDP tracking estimate for the US economy by 0.6pp to 0.2% from 0.8%

Key Quotes

“The weakness in March retail and wholesale inventories suggests that inventory accumulation in Q1 was weaker than we expected. This development implies that the drag from inventory accumulation was stronger than we estimated. However, the advance estimate of March goods trade deficit, released with the inventory data, was slightly narrower than we expected, which is positive to our tracking model. Additionally, incoming information suggests that the BEA will not incorporate retail sales annual revisions into the advance estimate of Q1 GDP growth.”

“The reversal of the impact of these revisions on our Q1 GDP tracking model was positive to our tracking estimate. Combining these developments, we are lowering our Q1 GDP tracking estimate by 0.6pp to 0.2% from 0.8%. Note that the advance estimate of Q1 GDP growth by the Bureau of Economic Analysis (BEA) will be released today.”