Disappointing Data

Given a widening trade deficit, disappointing retail sales, weak inventory accumulation and now yesterday’s surprisingly bad housing starts at just 836,000 units, I’m reducing my Q2 GDP estimate to just 1%. Interestingly, single-family starts, 2-4 unit starts, and 5+ starts have all lost ground and are each at their lowest level since 8/12. Second half 2013 growth should pick up, leaving full-year 2013 GDP growth at or slightly below 2%.