As has been typical for two quarters, there is a wide gap between the GDPNow forecast of 3.9% and the Nowcast forecast of 2.1%.
Once again, Nowcast is likely way too low.
Watch Real Final Sales
GDPNow is projecting a huge inventory build in the third quarter. Its base forecast is 3.9% but real final sales, the bottom line estimate of GDP is only 1.6%.
If accurate, an inventory build will add 2.3 percentage points to GDP at a time when sales and housing are in the midst of a slide.
There are a few more reports next week, so expect the GDPNow estimate to change a bit.
The BEA will report a number before Nowcast updates its estimate, a peculiar way of doing business even though I do not believe they take advantage.
I will post a guess on Thursday. The GDP report is due Friday.
Mike “Mish” Shedlock
Mish, for those of us unfamiliar with these metrics, what is the historical accuracy of GDPNow? Can we trust the number at all?