Just as Peter Schiff has been predicting, first-quarter GDP in the United States was revised dramatically lower today. The Commerce department previously estimated that US economic output rose 0.2% in the first quarter of 2015, but it is now reporting a seasonally adjusted rate of negative 0.7%.

Peter has anticipated this downward revision since the beginning of the second quarter. In his podcast on April 1st, he said:

Earlier in the week the Federal Reserve Bank of San Francisco came out and said that they think the GDP really grew… 1.8% in the first quarter, as opposed to the 0.2% that was originally released, which is likely to be revised down to a big negative number.

GDP fell nearly 3 full percentage points from the fourth quarter’s 2.2% to the first quarter’s negative 0.7%. This terrible economic data ruins the government narrative of an economic recovery. That’s precisely why the Bureau of Economic Analysis is looking at completely changing the way it reports and analyzes first-quarter GDP.

Peter wrote about this Orwellian news of data manipulation earlier this week:

…The BEA issued a blog post on May 22 in which it specified a number of areas in which it will eliminate what it calls ‘residual seasonality.’ This term should be accurately defined as ‘areas that we think should be higher.’

As if on cue, the Federal Reserve itself waded into the debate with its own new study (released by the San Francisco Fed – Janet Yellen’s former stomping grounds) that seemed to confirm and expand on Liesman’s analysis and the BEA’s concessions (makes one wonder if these campaigns are coordinated). Fed economists took a hard look at the disappointing .2% annualized first quarter 2015 growth, and determined that the seasonal adjustments that have been in use for years were insufficient to fully reveal the true health of the economy.”

Meanwhile, gold remains rangebound at about $1190 at this time. US stocks, on the other hand, fell on the poor GDP news.

No matter how the government monkeys with the economic data, it’s looking increasingly unlikely that the Fed will be able to justify a significant rate hike in 2015. When the markets realize this, gold could very well break out of its holding pattern.

Stay tuned. Peter will be releasing a new podcast soon with his latest thoughts on the most recent economic data.