A Little More Than A Week After Downgrading His Q1 GDP Forecast, Goldman's Hatzius Is Ready To Cut Again

Jan Hatzius

Goldman Sachs chief economist Jan Hatzius has just hinted he may cut is Q1 GDP outlook again, only a week after reducing his call to 2.5% growth for 2011 (via Zero Hedge).

Hatzius’ latest bearish turn comes as a result of today’s trade data, which didn’t show the improvements he was expecting.

From Goldman Sachs, via Zero Hedge:

The US trade balance improved much less than we expected in February, narrowing to -$45.8bn from a revised -$47.0bn in January. The “Chinese New Year effect” (discussed in the April 6 US Daily) was much smaller than we expected, with real goods imports declining by $4.5bn but less than half of the change due to manufactured goods imports. Meanwhile, exports were extremely weak, falling $3.7bn in real terms – the largest monthly drop in real exports on record outside a recession – so that the real trade balance improved by less than $1bn. Through February, the trade data suggest a large drag on GDP growth in the first quarter and suggest downside risk to our 2.5% forecast.

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