The Atlanta Fed GDPNow forecast dipped to 1.3% following the Census Department's Advance Economic Reports.

The New York Fed Nowcast model is 1.4% as July 19.

Big Difference?

Despite the apparent tiny difference between the models, the underlying assumptions may be quite different.

Whereas GDPNow breaks out inventory adjustments, Nowcast doesn't. So we cannot say for sure if the models are really in agreement.

Real Final Sales

GDPNow has "Real Final Sales" at 2.4%.

That is the true bottom line GDP estimate as inventories tend to zero over time.

One Heck of an Inventory Adjustment

The difference between the GDPNow base forecast and Real Final Sales is inventory.


Pat Higgins, GDPNow creator commented today "After this morning's Advance Economic Indicators and advance durable manufacturing reports from the U.S. Census Bureau, the nowcasts of the contributions of inventory investment and net exports to second-quarter real GDP growth decreased from -0.97 percentage points and -0.50 percentage points, respectively, to -1.09 percentage points and -0.63 percentage points, respectively."

The inventory adjustment takes about 46% off the GDPNow estimate. That's quite a lot.

Advance Reports

  1. Advance Durable Goods: May-June Revision Ping-Pong Match Continues with Durable Goods
  2. Advance Trade: Collapse in Trade: Exports Down 2.7%, Imports Down 2.2%
  3. Advance Inventories: Inventory Report a Bit Weaker than Expected

Advance GDP

Tomorrow the BEA will release its initial (advance) GDP estimate for the second quarter. Pay attention to real final sales, not the base GDP report.

A reader commented "Anyone trying to prove a point with tomorrow's report - good luck!"

I agree with that assessment as GDP is a hugely lagging indicator.

But my point is there is a big difference in current interpretation.

Mike "Mish" Shedlock

GDPNow Forecast Dips to 2.3%: Real Final Sales 1.3%

The discrepancy between GDPNow and Nowcast widened again. Importantly, GDPNow forecasts real final sales of just 1.3%.

GDPNow Forecast Dips Slightly to 1.7%, Nowcast Steady

Economic news took a tenth of a percent off the Atlanta Fed GDPNow forecasts. The New York Fed Nowcast was stable.

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.

Email Exchange With GDPNow Creator Pat Higgins on GDP Inventory Adjustments

GDPNow forecasts an inventory adjustment of -1.09 percentage points this quarter. What's going on?

Inventory Adjustment Add 2 Percentage Points to GDPNow Estimate

The gap between GDPNow and Nowcast is 2.6 percentage points, the widest ever. Inventories pad the GDPNow estimate.

GDPNow Forecast Suggests Possible Inventory Problem Coming Up

The GDPNow forecast jumped 0.6 percentage points this week, but nearly all of it was an inventory adjustment.

GDPNow Forecast Dips Slightly: Baseline 1.8%, Real Final Sales 1.1%

For GDPNow, a strong factory report could not overtake weak housing and trade reports. Divergence with Nowcast widens.

GDP Forecasts Dip Again: Forecasts Compared

In the wake of dismal retail sales, first-quarter GDP forecasts by the Atlanta Fed GDPNow model and the FRBNY Nowcast model ticked lower.

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.