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
- 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.
- 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.”
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Mike “Mish” Shedlock
The is no recovery only CB driven asset price inflation. Sorry Guys
BlockchainGDPNow is calling for double digit GDP gains
The DOW seems to be behaving as if Nowcast is correct (to the Moon, Alice), working on a nice parabolic arc.
what’s drivin that?Let’s take a wild guess!Moar gov’t (printing)borrowing moar for obamacaid,medicaid,prisons,cops,half way houses, even moar gov’t workers to man the soaring increase in homeless shelters and of course moar printed cash for a fresh war
Commercials primarily reduce shorts as a result of speculators reducing longs. Commercials, other than the actual mine-producers, simply take the other side of the trade. People nearly always phrase this ass-backward so as to blame the “shorts out to get them”. That aside, gold rose all the way to $1900 with commercials short the entire way. I am quite bullish on gold here.