US Growth Forecast scaling back to 1.7%

 Confronted with an economy that has decidedly underperformed this year, economists are scaling back their growth forecasts for 2011 and next year.

 For 2012, the group is forecasting growth of 2.3 percent, compared to a May forecast of 3.2 percent growth.In their latest forecast, top economists with the National Association for Business Economics predict that the economy will grow 1.7 percent this year(2011) — down from the group’s May prediction of 2.8 percent expansion.

The new survey, released Monday, is in line with the outlook of other economists who have marked

US GDP in Danger Zone..?

The first revision to Q1 GDP printed at 1.0%, down from the preliminary Q2 GDP print of 1.3%, and as expected was worse than Wall Street consensus of -1.1%, although it was certainly not as bad as the miss to the preliminary number. Stone McCarthy's forecast of 0.7% is not necessarily wrong: it is probably just early: the final revision to Q2 GDP will come on September 29, one week after the next FOMC meeting, and will be the last sub 1% GDP growth number before we see a negative GDP print for Q3. Personal Consumption printed a little better than expected at 0.4%, higher than consensus of 0.2%. Alas, this number will be whacked massively in Q3. Core PCE was also slightly higher than expectations of 2.1%, coming at 2.2%. The components of the 1.0% revised GDP were: PCE: 0.3%; Fixed Investment: 1.01%, Change in Private Inventories: -0.23%; Exports: 0.41%; Imports -0.31%; and Government consumption -0.18%. This is the third consecutive quarter in which the government has taken away from growth





And here is Goldman's breakdown:

1. Q2 real GDP growth was revised down to 1.0% (quarter-over-quarter, annualized) in the second estimate, down from 1.3% in the advance report. The revision reflected a reduction in the contribution from inventories to -0.2 percentage points (pp) from +0.2pp previously. Final sales growth-GDP excluding the effects of inventories-was revised up to 1.2% from 1.1% in the advance report. Changes in the components were in line with our expectations. Consumer spending and business fixed investment were revised up, but net exports were revised down. Other components were close to unchanged.

Bernanke's Put, European PMI/Debts, Anna Hazare

Goldman Sachs has down graded the Growth prospect for US in Q3 and Q4. The head line news shall rumble as week is entered.

 Anna Hazare's Agitation now elapses a week. The Gritty man and his millions of agitators shall be entering into a crucial phase. The Indian government has barricaded itself with ' Standing Committee' and the Equity markets have been silent watcher or has yet react. It is expected that, Congress who has no political leadership, will find the situation intolerable. The deterioration of Anna's health or that of any other activist, may cause ' Ripples' and cause Infectious consequences. The Parliament is likely to Buzz, the mammoth human rally, across the Length and Breadth of the nation. The Government seems to have ignoring the issue and the costs may rise. The Uncertainty may chase the market and business sentiment. 

Recession Crusader 

Bernanke's Put and Jackson Hole : In the FOMC minutes, FED had immensely elaborated the its options and Mr Bernanke exercised, ' PUT '. The occasion shall be an ideal place to respond the 3 Wise man, who voted against the decision, in last Meet. 2) Mr. Bernanke is likely to Explain the Utility of the ' Declaration of Mid 2013' and may be explicit about the Intentions, of accommodative Policies. 

French- German finance Ministers, shall be meeting on the Tuesday to further shape up the Merkel-Sarkozy accord and its efficacy. European Bank and Its Stake holders appear to have been loosing ' patience' and insecure.


The Flash P.M.I. Survey's may add some ' Glucose' in the early part of the week, on Tuesday

US Data : Economic reports in the coming week include new-home sales Monday, durable goods Wednesday, and weekly jobless claims Thursday. A second reading on second quarter GDP is released Friday, as is consumer sentiment for August.


The end of month data may mixed and markets are likely to reach in oversold zone. 


Its anticipated that, the early part of the week shall remain Weak and Week end GDP nos shall be  a threat. 
Expecting a ' Squeeze Rally ' in between as relief rally.  


My Note : I remain preoccupied with world moving around and making me restless and uneasy. My animal sense is smelling a ' tragedy' in India.