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Concern grows GDP report Friday will barely show economic growth

The closely watched Atlanta Federal Reserve's GDPNow forecast shows just 0.2 percent growth for the first quarter, based in part on softer consumer data.

The Atlanta Fed said it also adjusted its final GDPNow model forecast from last week's 0.5 percent based on a decline in the contribution from inventory investment.

Most economists on Wall Street have higher forecasts, but JPMorgan Chase cut its first-quarter growth forecast to 0.3 percent Thursday after trimming it to 0.4 percent Wednesday, and Macroeconomic Advisers sliced its tracking forecast to 0.3 percent.

The official first-quarter GDP reading will be out Friday at 8:30 a.m. ET.

Economists mostly expect second-quarter growth to pick up, and many blame first-quarter weakness on a soft patch and weather. Macroeconomic Advisers raised their forecast for the second quarter to 3.7 percent, based on the anticipated impact of inventories investment.

"The forecast of first-quarter real consumer spending growth fell from 0.3 percent to 0.1 percent after yesterday's annual retail trade revision by the U.S. Census Bureau. The forecast of the contribution of inventory investment to first-quarter growth declined from -0.76 percentage points to -1.11 percentage points after this morning's advance reports on durable manufacturing and wholesale and retail inventories from the Census Bureau," the Atlanta Fed said.

However, the forecast of real equipment investment growth rose to 6.6 percent from 5.5 percent, after the durable manufacturing report Thursday, and the inclusion of data on the sales of light trucks to businesses. Durable goods orders for March rose 0.7 percent, below the 1.2 percent forecast by economists.

The JPMorgan economists cut their view from 0.6 percent on Wednesday, after reviewing the same annual revisions to retail sales data, which reflected a softer trend of consumer spending.

CNBC/Moody's Analytics Rapid Update, based on a survey of economists, showed average growth forecasts for the first quarter at 0.9 percent Thursday. Economists also saw growth tracking at an average 0.8 percent, based on actual data releases so far.

A Census Bureau report Wednesday reduced retail sales growth to 3.7 percent, from 4 percent. But the control retail sales, used to calculate GDP, fell from 4.1 percent to 3 percent, JPMorgan said. That figure excludes food services, auto dealers, gasoline stations and building materials outlets.

"We now think that real consumption increased only 0.6 percent saar in 1Q [previously: 0.9 percent]," they wrote. In March, retail sales slipped by a surprise 0.2 percent, the second straight monthly decline.