As US is being paraded around as the only hope to save the sinking ship of eurozone, buffer the meltdown in China and just turn things around somehow, the Bureau of Economic Analysis has revised down Q1 GDP growth estimate another notch this time.

The Q1 GDP growth is expected to come at 2.4 percent now, revised down from the month ago estimate of 2.5 percent. This misses economic forecasts that were expecting it to remain unchanged. Personal consumption growth estimate was pushed up from 3.2 percent to 3.4 percent, exceeding expectation of revision to 3.3 percent.

US Q1 GDP

GDP Growth Comparison

The present estimate of 2.4 percent GDP growth in Q1 is compared with the 0.4 percent growth achieved in Q4. The current downward revision is based on a reduced private inventory investment in exports/imports, however according to  Bureau of Economic Analysis there is no other great change in the economic activity.

Motor vehicle output contributed 0.28 percentage points to Q1 GDP, compared to 0.18 in Q4, computer sales added 0.02 percentage points compared to 0.1 percentage point change in real GDP in Q4. The index for gross domestic purchases rose 1.2 percent in Q1, which is more than the estimate but lesser than the 1.6 percent raise in the final quarter of 2012. Real personal consumption expenditures increased 3.4 percent, durable goods increased 8.2 percent, non-durable goods increased 2.2 percent and  services increased 3.1 percent in Q1.

Meanwhile gold seems to have picked some of the lost investor interest, reaching a week’s high as the Federal Reserve hinted of tapering QE and Japan Nikkei shook twice within the span of a few days. If the Fed indeed carries out on its unwinding of QE, there may be further contraction in investor confidence and greater flight towards physical assets.