The Atlanta Fed GDPNow Forecast for fourth-quarter GDP took a half-percentage-point dive following today's economic reports.

GDPNow Forecast: 2.7% - January 5, 2018

Image placeholder title
  • The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2017 is 2.7 percent on January 5, down from 3.2 percent on January 3.
  • The forecasts of real consumer spending growth and real private fixed-investment growth decreased from 3.2 percent and 8.9 percent, respectively, to 3.0 percent and 7.6 percent, respectively, after this morning's employment report from the U.S. Bureau of Labor Statistics and this morning's Non-Manufacturing ISM Report On Business from the Institute for Supply Management.
  • The model's estimate of the dynamic factor for December—normalized to have mean 0 and standard deviation 1 and used to forecast the yet-to-be released monthly GDP source data—fell from 1.44 to 0.37 after the reports.

Nowcast Forecast: 4.0% - January 5, 2018

In contrast to the often far more volatile GDPNow Model, the New York Fed Nowcast Model rose slightly in the past week.

Image placeholder title
  • The New York Fed Staff Nowcast stands at 4.0% for 2017:Q4 and 3.4% for 2018:Q1.
  • News from this week's data releases increased the nowcast for 2017:Q4 by 0.1 percentage point and increased the nowcast for 2018:Q1 by 0.3 percentage point.
  • Positive surprises from the ISM Manufacturing PMI and from trade data accounted for most of the increase.


Other Estimates

  • Following Markit's Service PMI report yesterday, Markit Chief Economist Chris Williamson estimated 4th quarter GDP at 2-2.5%.
  • Merrill Lynch: 2.3% (as noted below)

Nowcast Out of Line

The forecast by the Nowcast model seems was out of line, which is what I said about GDPNow when it soared to 4.5%.

To be specific, I said, "I'll take the under, way under."

Related Articles

December Jobs Up 148K Following ADP 250K "Overheating" Estimate

Slower Expansion in Non-Manufacturing ISM and Markit Services PMI

Mike "Mish" Shedlock

GDPNow vs Nowcast: Little Change From Week Ago, 3.9% vs 2.8%

From a week ago, the GDP forecasts moved little on the economic news. Nowcast was unchanged. GDPNow rose 0.1 pp to 3.9%.

GDPNow ISM Bounce Fades: Forecast Dips to 3.8%, Nowcast Remains 2.8%

Volatility remains the name of the game for GDPNow. Nonvolatility is the game for the New York Fed Nowcast.

GDP Forecasts Sink After Outstanding Jobs Report: GDPNow vs Nowcast

The latest GDP forecasts put in a big question of the strength of the economy.

GDPNow, Nowcast Near Convergence in 4th Quarter GDP Estimates

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 Forecast Sinks on ISM and Construction Reports

The GDPNow forecast fell to 1.7% on September 3 following weak construction and ISM reports.

Huge Difference Between GDPNow and Nowcast Models

The Atlanta Fed GDPNow and the New York Fed Nowcast GDP models once again are wildly different.

GDPNow 1st Quarter Forecast Plunges to 1.3% Following Vehicle Sales and Factory Orders Reports

The GDPNow Model forecast for 1st quarter 2017 GDP plunged 0.5 percentage points to 1.3% following recent 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.

Nowcast, GDPNow Diverge Widely Again: What Happened?

After converging, the gap between the GDPNow Model forecast and the FRBNY Nowcast model has widened again.