Overview
Goldman Sachs’ Q1 GDP tracker now stands at 3.3% on a quarter-over-quarter annualized basis, reflecting recent monthly data revisions and detail that altered near-term growth assumptions. The bank notes that the reduction in the U.S. trade deficit in January was larger than expected, a move that influences the tracking estimate, although much of that improvement stems from an increase in gold exports that are excluded from official GDP measures.
Trade and GDP treatment
The narrowing of the trade deficit in January was driven primarily by higher exports of gold. Because gold exports are not captured in GDP calculations, the improvement in the trade balance does not translate one-for-one into measured GDP growth. Goldman’s tracker incorporates this distinction when reconciling trade flows with its GDP read.
Housing and labor details
Housing starts rose 7.2% in the month, surpassing consensus expectations that had anticipated a decline. At the same time, the previously reported December housing starts figure was revised lower, which affects the net contribution from residential investment when aggregating for the quarter. Initial jobless claims edged lower and are reported to be below their average level from the second half of 2025, a sign that the labor market remains relatively firm.
Offsetting factors for Q1 tracking
Goldman highlights that higher oil prices in March exerted a drag on its Q1 GDP tracking estimate, partially offsetting the positive signals coming from trade and housing starts versus earlier assumptions. The bank’s 3.3% tracker therefore reflects both the upside surprises in some monthly releases and the drag from energy prices late in the quarter.
Context and caveats
The current tracking estimate is based on the pattern of monthly data and the revisions reported. Where trade improvements are concentrated in categories excluded from GDP, and where prior-month levels are revised down, the composition of those flows matters materially for the tracking outcome. The jobless claims reading, while supportive of demand through a firmer labor market, is described as in line with expectations.
Key points
- Goldman Sachs’ Q1 GDP tracker is 3.3% annualized, reflecting recent monthly data and price effects.
- January’s trade deficit narrowed largely due to increased gold exports, which are excluded from GDP calculations, muting the impact on measured growth.
- Housing starts rose 7.2% and initial jobless claims edged lower, with the labor metric remaining under its second-half-2025 average.
Risks and uncertainties
- Higher oil prices in March act as a direct drag on Q1 tracking, reducing measured growth - this affects energy-exposed sectors and the overall GDP estimate.
- The improvement in the trade balance is concentrated in gold exports excluded from GDP, creating uncertainty about how much the narrower deficit will contribute to measured output.
- Revisions to prior housing starts data (December) introduce volatility in the contribution from residential investment and complicate quarter-over-quarter comparisons.
Implications for markets and sectors
Trade classifications and commodity price movements are exerting outsized influence on short-term GDP tracking. Housing activity and labor market durability are supportive elements, while energy price swings work in the opposite direction. Investors tracking growth mechanically via monthly flows should note the composition effects highlighted by the data.