America has one of the best quarters in decades in Q2, but now as everyone’s been trying to warn you, we can officially say the wheels have came off in Q3 of the United States economy.
The New York Federal Reserve has suspended its GDP tracking model after today’s catastrophic jobs report, and near record plunge in consumer confidence. Those two things coupled with troubling retail sales where reports have now missed expectations for 3 months in a row, and we have a real problem in America.
You can say it’s due to restrictions from the Covid nonsense and the Delta variant, but bank after bank too an axe to the face. Morgan Stanley, took a nuke to their Q3 forecast, while Goldman is now expecting GDP to grow just by 3.5% this quarter, the second downgrade they’ve issued in a month. (It was 8.5% just one month ago) while Morgan Stanley cut their GDP projections to just 2.9% from 6.5% previously.
Banks were as usual behind the curve in this, only catching up to what readers and those paying attention knew a month ago, the regional Fed was dead last, with the Atlanta Fed’s GDPNow model yesterday cut to just 3.7% from 5.3% on September 1.
When the New York Federal Reserve didn’t suspend its nowcast model in 2020 when it seemed dire, and they are doing it now, what does that say folks?
According to our friends at Zero Hedge, there are two ways to interpret this news. Its sudden and unexpected, and quite shocking of a development. It’s also coming from some of the smartest economists in the room. You could say well, nobody really knows anything, which seems to be the case most of the time, or the data is so ugly that instead of lipsticking, adjusting, and goal seeking it to make it look more attractive, in its “tracker”, the New York Federal Reserve Bank has just decided to not even cover it anymore. If it’s the latter, that should scare the hell out of you.
Thanks to our friends at Zero Hedge for contributing to this article.
Up next: the BLS suspends its jobs report, ADP suspends its private payrolls update, the BEA suspends its GDP and PCE estimate, and the Dept of Labor suspends its CPI and PPI reports due to “uncertainty around the pandemic and the consequent volatility in the data.”