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Takeaway: 3Q growth estimates coming down....again. Don't say we didn't warn you.

This note was originally published August 29, 2014 at 13:56 in Macro

We’re seeing 3Q growth estimates come down today (again) alongside soft consumer spending data in July. 

Real consumer spending declined the most in 6 months to start 3Q, decelerating on both a 1Y and 2Y basis with softness ubiquitous across Services, Durables and Nondurables.  Notably, the savings rate ticked up to 5.7% - the highest level in 18 months.

In short, while the income-savings dynamics are shifting favorably for forward consumption, in the immediate/intermediate term (& inclusive of today’s negative growth revision), we think consensus estimates -  which remain laughably linear – need to come in further.

Yep, US GDP Growth Is Slowing - drake222

Yep, US GDP Growth Is Slowing - consumer spending YoY

Yep, US GDP Growth Is Slowing - Chart of the Day

Christian B. Drake