GDPNow vs Nowcast
Data Sources
Last quarter we saw gaps of 2 percentage points between GDPNow and Nowcast. The spread is now 0.1 percentage point.
One potential problems with both reports is lack of economic data. Thanks to the government shutdown, workers did not produces dozens of reports. Today, the New Home Sales report was skipped for the second month.
Mike "Mish" Shedlock
Following months of wide differences between GDP forecast models, the Atlanta Fed GDPNow and the New York Fed Nowcast models are in near convergence at 3.3% and 3.2% respectively.
GDPNow upped its 4th-quarter GDP estimate to 3.3% from 2.9% a week ago. Nowcast upped its forecast to 4.0% from 3.9%.
In sharp contrast to a GDPNow forecast of 3.1 percent for 4th quarter GDP, the FRBNY Nowcast Model estimates 4th quarter GDP at a mere 1.6 percent.
The volatility of GDPNow vs Nowcast is once again on display in recent weeks.
Both the Atlanta Fed GDPNow and the New York Fed Nowcast updated their models today. Let’s take a look at where they stand for second-quarter GDP.
The Atlanta Fed GDPNow forecast came out yesterday, the New York Fed Nowcast today.
Following the ISM manufacturing report, the GDPNow model upped its 4th quarter GDP forecast from 2.9% to 4.5%. Today, the Federal Reserve Bank of New York Nowcast weighed in with a 3.2% forecast. Also today, GDPNow revised its forecast to 3.3%.
We have two revisions coming for second-quarter GDP estimates even as time rolls on. The third-quarter is already a month over. GDPNow has its first estimate, a whopping 3.7%. The GDPNow estimate is 1.7 percentage points higher than Nowcast.
As of last Friday, the Atlanta Fed GDFPNow model for the second-quarter GDP stood at 3.4%. In contrast, the FRBNY Nowcast report was 2.2%.
