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Expect a New GDP High Tomorrow, For Millions, It Won't Feel Like It

Although GDP estimates are falling fast, expect to see a new high in tomorrow's advance estimate of 2nd-Quarter 2021 GDP.
Evolution of Atlanta Fed GDPNow 2021-07-28

GDP 2nd Quarter Forecasts 8 Miles High and Falling Fast

Because of huge covid distortions on GDP models, I have not followed them for about a year.

With 2nd-quarter GDP results out tomorrow, I thought I would take a look. 

GDPNow Forecast 

The Atlanta Fed GDPNow Forecast is 6.4% today down from 7.7% yesterday.

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2021 is 6.4 percent on July 28, down from 7.4 percent on July 27. After this morning’s Advance Economic Indicators report from the U.S. Census Bureau, the nowcast of second-quarter real gross private domestic investment growth decreased from 2.8 percent to -2.4 percent.

The GDPNow forecast peaked at 13.7% on May 5 following the ISM Non-Manufacturing (services) report. 

The GDP Real Final Sales forecast (the bottom line number excluding inventories) is 7.0%. 

New York Fed Nowcast

New York Fed Nowcast 2021-07-28

The New York Fed Nowcast stands at 3.16%.


Econoday Consensus

For those who want a third opinion, the Bloomberg Econoday Consensus is 8.0% in a range of 5.6% to 9.5%.

Real GDP Number to Beat

Real GDP Number to Beat

The previous economic high was in the 4th quarter of 2019. A rise in real GDP that exceeds 0.88% or better will take out the previous high.

A new high is given. Expect chants of "Recession Over". But for many millions of unemployed it won't feel like it. 

And employed or not inflation is the concern. Today the Fed admitted "Inflation Might be Higher and More Persistent Than Expected".


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GDP Tomorrow: Here's the Final Forecasts

The first estimate for 4th-quarter GDP is due tomorrow. Let's take a look at some estimates.

Final Model Forecasts for First Quarter GDP: GDPNow 2.0%, Nowcast 2.9%

The advance (first) estimate of first-quarter GDP is published tomorrow. The GDPNow final estimate is 2.0%, Nowcast 2.9%

4th Quarter GDP On High End of Expectations at 2.6%

The BEA combined the advance and second estimate into an "initial" report. Some data items were missing.

Here We Go Again: GDPNow Projects 4.1% GDP

At the start of every quarter the Atlanta Fed model typically projects wildly high GDP estimates that drop over time.

GDP a strong 4.1%, Saving Rate Revised Much Higher, Talk of Overheating

The BEA released the 2nd Quarter 2018 GDP (Advance Estimate) including a Comprehensive Update: 1929 Through 2018 Q1.

Weaker Than Expected GDP: Mixed Bag or Worse?

Fourth Quarter real GDP came in at 2.6%. Nowcast estimated 3.9%, GDPNow 3.4%. Let's dive into the report.

GDP Bounce as Expected, Spending Jumps

The consensus opinion got GDP right this month for the first time in three quarters.