Whatever the GDP report shows Friday morning, it’s likely to be on the high side by 0.2 percentage points.

Of course, GDP is already one of the most revised stats, but this quarter estimate may be particularly bad due to methodology changes not implemented in time.

The Wall Street Journal explains Why the GDP Report Could Make U.S. Growth Look Rosier Than It Is.

On Friday the government will release data that’s widely expected to show slow growth in U.S. output in the first quarter. Now—even before its release—there’s evidence output growth was even slower than this estimate will convey.

The Commerce Department’s Bureau of Economic Analysis won’t incorporate into its growth estimates recently revised U.S. retail sales data that were made public Wednesday. Instead, these revisions will be incorporated next month, when the BEA updates its first-quarter estimates of gross domestic product, the government’s broadest measure of the economy’s output.

The downward revisions to the retail-sales data suggest consumer spending was weaker in the first quarter than previously estimated. But the revisions didn’t come through soon enough to incorporate into the upcoming report.

Using the new figures could subtract two-tenths of a percentage point from the “headline” figure in Friday’s GDP report, said Ben Herzon, economist with the private forecasting firm Macroeconomic Advisers. Economists polled by The Wall Street Journal are expecting 1% growth, at an annual rate, in overall GDP, based on the previous retail figures.

The old retail figures showed so-called core retail sales–which exclude autos, gasoline and building materials–grew at a 4.1% annual rate in the first quarter. The new data show core sales grew at a 3.2% rate, Mr. Herzon said. These core sales data are used to estimate consumer spending, which is a major input in the GDP report.

Mish Estimate 0.4%

My estimate is recorded at 0.4% (See Six GDP Estimates (Three Revised Today): ZeroHedge, Mish, GDPNow, Nowcast, ISM, Markit). If the BEA reading comes in below that number, revisions may take the estimate into negative territory.

If the BEA reading comes in below that number, revisions may take the estimate into negative territory.

A negative outright report would not surprise me in the least.

Looking ahead, my preliminary GDP estimate for the second quarter is “under 1.0%”.

If it’s that low, will the Fed hike?

We are about to find out.