JPM lowered its estimate of Q2 US GDP growth a second time in a week to 2%.

On May 24th, they revised down their estimate to 2.5% from 3%.

A lot can happen in a week.  Here are the key takeaways from today's revision:

  • Most of our downward revision in Q2 is located in consumer spending
  • We are leaving our Q3 GDP call at 3% based in part on the potential for a bounce back in manufacturing and motor vehicle production as Japanese supply chains normalized
  • Forecast assumes debt ceiling issue is resolved in a manner which does not see technical default of the US Treasury
  • FED call to first hike in Q1 2013 stands unchanged

If the US were to see a default on it's debt, Goldman Sachs lowered Q2 US GDP last week as well but only to 3% from 3.5%.  I wonder if they will lower their revision as well after seeing JPM's report later this week or next.