Q1 GDP at 0% Growth – When Will the Markets Wake Up? (Audio)
The US markets are closed today, but the March jobs numbers were release this morning — 126,000 non-farm payroll jobs were created last month. The forecast was for 245,000 new jobs, so this is a terrible report that falls nearly 50% short of expectations.
Taking into account all the economic data thus far in 2015, it’s no wonder that the Atlanta Fed’s GDPNow metric puts 1st quarter GDP growth at 0%.
None of this comes as a surprise to Peter Schiff, who has been predicting this slow descent into another recession for some time. His podcast from earlier this week reviews the latest awful economic data and predicts the poor jobs numbers that we saw this morning.
Highlights from Peter’s podcast:
“We have a lot of economic news to catch you up on, which means a lot of bad news. All of the news that has come out has been bad. In fact, it has been so bad that this Atlanta Fed GDPNow estimate for first quarter GDP has finally moved all the way down to zero… We may end up with a negative number, but not too long ago that number was around 2.5%…
“Even given the horrific data that has come out thus far for the first quarter… everybody is convinced that the second quarter is going to be a boom… We’ve been seeing some of the worst economic data, not since last winter when [the weather] was even worse, but since the 2008 financial crisis. Arguably, the US economy today is as weak as its been since those dark days of the Lehman Brothers crisis of 2008…
“I don’t see where the consumer is going to come powering to the rescue [of the economy in the second quarter], when he’s got a low-paying job, an escalating cost of living. He’s trying desperately to rebuild his savings… They’re not even spending the money they saved on gas prices…
“We’re now finding that US corporate profits actually fell, despite the fact that the stock market has been rising…
“We did get fourth quarter corporate profits, and they dropped by 3%. It was the largest quarterly decline since the first quarter of 2011. I think the first quarter of 2015… when we get those numbers, it could be even uglier than the fourth quarter of last year.
“We did get the final revisions for fourth quarter US GDP. The second revision was 2.2%. Wall Street was looking for a slightly upwardly revised 2.4%. Well, they were wrong… It stayed at 2.2%…
“Also, on Friday we got March, University of Michigan, consumer sentiment… It was the first back-to-back decline in that index since October 2013…
“We got personal income and spending on Monday this week. Spending rose just 0.1% in February. That was the fourth consecutive month where consumers spent month than had been estimated…
“Also Monday, we got the March Dallas Fed manufacturing index. It plunged by 17.4%. That is the sharpest 1-month decline since 2008… Nothing like it even last winter… We’re now at the lowest level since June of 2011. The air is coming out of this bubble so rapidly, and we still have zero-percent interest rates…
“We got Chicago PMI on Tuesday. Below 50 in March. This is the second consecutive month that the index was below 50. In fact, it was at 46.3, which was well below estimates. They were looking for it to increase above 50… We’re right near 6-year lows… The same levels [during] the Great Recession…
“The ADP is a survey of private payrolls, and that came out today [Wednesday]. They were looking for 230,000… We got 189,000 in March. That’s the lowest ADP number in 14 months, and it was the biggest miss based on what they expected in 4 years. Remember, Janet Yellen said they are not going to raise rates at the Fed until the employment picture improves…
“March ISM manufacturing index dropped again to 51.5. This is the lowest level for March ISM in 22 months. It’s the first time we’ve had a 5-month decline… [since] 2008, during the financial crisis. Yet again, here’s another economic data that hasn’t been this bad since the depths of the Great Recession…
“We also got construction spending unexpectedly fell in February. Unexpectedly! … It only fell 0.1%, but they were expecting an increase. Worse yet, they revised the January drop much, much lower. It was originally 1.1%, now they say 1.7%…
“The price of gold now recovering back above that psychologically important $1200 level. We’re now at $1203, so we’re about $50 off the lows we were at not too long ago, around when Janet Yellen had her conference. The US dollar is still on the defensive… but it’s not making new highs any more…”
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