The GDP nowcast dipped on import/export prices but rose on retail sales.
Pat Higgins at GDPNow has made official adjustments to its model to account for gold imports.
The base model doesn’t adjust for gold imports/exports but the BEA does.
Gold bars and bullion are considered financial assets and gold imports have soared along with other imports, front-running tariffs.
For discussion, please see my March 27, 2025 GDPNow Discussion.
The gold-adjusted numbers are the ones to follow. Starting February 28, my chart only shows the adjusted numbers.
Latest Developments
The import-export price report on the 15th took 0.1 percentage points off the Nowcast and 0.2 percentage points off Real Final Sales (RFS).
Today’s strong retail sales forecast added 0.4 percentage points to the Nowcast and 0.5 percentage points to Real Final Sales (RFS).
Latest Forecast
- Nowcast: -0.1 Percent
- Real Final Sales: -0.4 Percent
Real Final Sales is the important number. The difference between the Nowcast and RFS is inventory adjustment that nets to zero over time.
However, I wonder about inventories looking ahead because of all the tariff front-running of parts and general merchandise from highly-tariffed nations.
Related Posts
April 16, 2025: Retail Sales Surge in March Led by Tariff Front-Running of Autos
Forecasters accurately predicted tariff front-running would accelerate durable goods sales.
April 15, 2025: A Trade War Debate, Who Has the Cards, the US or China?
Let’s discuss a pair of articles from ZeroHedge and Politico.
April 14, 2025: Trump’s Plan to Make Manufacturing Great Again in Pictures
The share of manufacturing employment keeps declining. What role did NAFTA play?
Please read the above post. It highlights the major problems with Trump’s promise to restore manufacturing greatness.
Hey Mish,
I’ve been reading you for years now and appreciate your insight.
However, I am curious as to why you only cite the Atlanta Fed GDPNow model when writing about GDP projections.
I know you’re well aware of the Fed Nowcast models from the St. Louis and NY Feds.
Those two models are projecting GDP growth of 2.87% and 2.6% respectively.
This compares to the GDPNow model that is projecting -2.2% GDP growth with no adjustments for gold imports and -0.1% when adjusted for the gold imports.
I have no idea whether the other two models adjust for gold imports, but I presume they do not.
Even if they do, those two models are very close to parity, whereas the GDPNow forecast seems to be the odd man out.
Who knows if either of them will be accurate or which models will be closer to reality, but instead of continually writing about how the GDPNow model shows a slight contraction, how about showing what the other models show?
They both contradict the Atlanta Fed’s model significantly and paint a different picture for your readers than the one you seem to be trying to paint for them.
Found the juxtaposition of your last two headlines very interesting:
Retail Sales Surge in March Led by Tariff Front-Running of Autos. Followed by:
GDPNow Estimate Rises on Retail Sales
What value is GDP NOW if it doesn’t factor in the front running of autos? Seriously, how does GDP NOW add value?
The demand for money is higher, velocity lower.
Drunken Sailors Back in Splurge Mode, Retail Sales Surge. Even at Restaurants & Bars not Part of Frontrunning Tariffshttps://wolfstreet.com/2025/04/16/drunken-sailors-back-in-splurge-mode-retail-sales-surge-even-at-restaurants-bars-not-part-of-frontrunning-tariffs/#comments
That was a strong retail sales number. Dems are busy throwing mud on it.
The U.S. consumer continues to drive the bus. The U.S. still accounts for 40% of the world’s consumption per Mr Wonderful.
What is scaring me is the bond market. Who knows what shenanigans private equity has been up to including excessive leverage.
Looks like gold is the flight to safety option instead of bonds this time around. Would not surprise me to see gold peaking in the $4000 to $4500 range especially with continued weakening in the dollar.
Nothing is wrong with the US bond market.
Chinese GDP was 5.4%, exceeding the 5.2% expected.
US GDP is close to zero.
Winning.
Off topic. The US is using section 232 to investigate import harm and possible tariffs on: copper, lumber, semiconductors, pharmaceuticals and now CRITICAL MINERALS.
Also considering raising tariffs on China to 245%.
The United States does not produce several critical minerals domestically, relying heavily on imports for its needs. These minerals, essential for various industries, include lithium, graphite, rare earth elements, cobalt, and others like antimony, arsenic, and beryllium.