The GDPNow model forecast rose 0.3 percentage points due to a favorable imports-export trade report on that day.

GDPNow creator Pat Higgins commented "The nowcast of the contribution of net exports to fourth-quarter real GDP growth increased from -0.52 percentage points to -0.23 percentage points after this morning’s international trade report from the U.S. Census Bureau and the U.S. Bureau of Economic Analysis."

Meanwhile the New York Fed Nowcast model had the nearly equal but opposite reaction.

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GDPNow vs Nowcast

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The models have been reasonably close all quarter. The gap widened on Febuary 6 when GDPNow rose .03 PP while Nowcast fell 0.2 PP on the same trade data.

Trade Gap Narrows


The trade gap shrinkage on Feb 6 was unexpected. I commented Trade Deficit Shrinks in November Primarily Due to Falling Imports.

Here's a couple of important points.

  • This was November, not December data, the latter is still delayed due to the government shutdown.
  • Via Bloomberg, "The narrowing of the trade balance in November is unsustainable and was due to one-off factors -- some of which are poised to reverse soon. We expect the trade gap to widen in December, translating into a net drag on growth at the end of 2018. All told, monetary policy is unlikely to be driven by changes in trade policy."

I believe Bloomberg is correct. Thus, it appears GDPNow over-reacted to data that is highly questionable.

GDP Pot Shot

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More so than usual, expect a GDP Pot Shot on Feb 28, as Not All Inputs Finalized.

  • Construction spending, international trade, and inventories are GDP inputs.
  • The BEA will run with the advance trade, wholesale and retail inventory indicators released on February 27 rather than full reports.
  • New home sales for December as well as construction appear to be complete pot shots. Those reports come out after the GDP estimate.

Mike "Mish" Shedlock

GDPNow and Nowcast Converging (Opposite Direction Movement on Same Data)

The Atlanta Fed GDPNow Model and the New York Fed Nowcast models head towards convergence. This past week the models again moved in opposite directions on the same economic data.

GDPNow Forecast Rises, Nowcast Dips on Same Economic Data

On Friday, the GDPNow and Nowcast models updated their 4th quarter GDP forecasts. One model rose, the other fell.

GDPNow Forecast Up Huge on Positive Economic Data

The Atlanta Fed GDPNow Model forecast for 4th-Quarter GDP jumped strongly today on economic reports since November 19.

Nowcast vs. GDPNow: Questioning the Absurdity of Nowcast's Non-Volatility

Nowcast had no reaction to 35 of 35 economic data points since June 19. GDPNow rose 0.7 PP since July 6.

GDPNow vs Nowcast Gap Widens Again, Huge GDPNow Inventory Contribution

The Atlanta Fed GDPNow Model Forecasts 4.2% GDP Growth. Nowcast is 2.3%. Inventories contribute 2.2 % to GDPNow.

GDP Pot Shot on Feb 28, Not All Inputs Finalized

The GDP report on Feb 28 will be a combined first and second estimate. It appears to be a kludge.

GDP Forecasts: GDPNow 3.4%, Nowcast 1.9%

The GDP forecasts by the Atlanta Fed GDPNow model and the New York Fed Nowcast are once again not in the same ballpark.

Nowcast GDP Forecast Surges, GDPNow Forecast is Down a Bit

The GDPNow and Nowcast GDP forecasts for the first quarter of 2020 converged quite a bit today.

GDPNow vs Nowcast: Bit of Convergence but Inventory Problem Looms

The Atlanta Fed GDPNow forecast came out yesterday, the New York Fed Nowcast today.