HUGE MISS ON US GDP

American flag hot rod car tornado destructionREUTERS/Carlo AllegriA U.S. flag sticks out the window of a damaged hot rod car in a suburban area after a tornado near Vilonia, Arkansas.

The Bureau of Economic Analysis’ first estimate of Q1 GDP is out and the numbers are mixed.

GDP slowed to 0.1% in Q1 from 2.6% in Q4.

Economists were estimating GDP growth decelerated to 1.2%

More to come…

EARLIER (8:00 am):

“We figure that the weather drag on domestic demand lowered growth by more than 1 percentage point, contributing to more sluggish gains in consumption and business investment and a decline in residential investment,” said Morgan Stanley’s Ted Wieseman.

“Despite GDP likely growing at an anemic rate of around 1.0% in Q1, we remain optimistic about the rest of 2014,” said Goldman Sachs’ Kris Dawsey. “The core narrative for a pickup in growth this year has not changed. The fiscal drag is still lower, consumer spending should still strengthen, and business investment seems poised for a comeback. We see the weakness in Q1 as mainly driven by temporary factors, including a large drag from weather and inventories. The recent encouraging dataflow — with the exception of some of the housing numbers — appears consistent with our forecast for a near-term pickup. For the remainder of 2014, 3%+growth remains our baseline.”

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