JG,
I went through the report this morning and you are right that it doesn’t equate to immediate soft landing but if you remove the 0.4% number due to added inventory, the number comes out to be the same 1.8% as expected by the consensus of economists. The same economists now predict Q4 GDP to be 2.6%. In general, no matter how you spin it, it is better news than the original 1.6% GDP number. But folks here have been trying to point out the same thing to ultra bears around that there are too many moving parts to accurately predict macro economic numbers. Yes, we are headed into 2007 very cautiously, there are signs of slowdown and possibly recession but don’t make predictions like GDP will be 0% in Q4 or SP500 will be 600 by Q12007.
Roubini is getting a beating on his blog for previously drumming up the fact that his forecast of Q3 GDP of 1.5% was closest and consensus forecast(1.8%) was wrong. I think Roubini deserves the criticism he is getting and cannot use excuses like high invesntories, imports, etc in the report today. The way he strongly pedicted 1.5% sounded as if he should have known and factored all these things into his prediction. If he didn’t knew about these, he should have been far more cautious in his predictions.
