The Atlanta Fed GDPNow Model forecasts a number we all hope is wrong.

After this morning's Advance Economic Indicators report from the U.S. Census Bureau and personal income and outlays release from the U.S. Bureau of Economic Analysis, the nowcast of second-quarter real personal consumption expenditures growth decreased from -43.3 percent to -56.5 percent and the nowcast of the contribution of change in real net exports to second-quarter real GDP growth decreased from 2.07 percentage points to 0.73 percentage points.

The New York Fed Nowcast estimate took a dive to -35.5% from -30.5%.

Annualized Numbers

Both numbers are seasonally-adjusted annualized quarterly-numbers so the estimate is awful, but not as bad as it looks.

Income Surges as Spending Drops Most on Record

The forecasts plunged due to a BEA report that showed Income Surges as Spending Drops Most on Record

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Income and Outlays

  • Income: +10.5%
  • Disposable Personal Income: +12.9%
  • Real Disposable Income: +13.4%
  • Personal Consumption Expenditures: -13.6%
  • Real Personal Consumption Expenditures: -13.2%

Amazing Leap in Savings Rate to Record 33 Percent

As a result an alleged rise in Disposable Personal Income of 12.9% and a drop of -13.6% in spending, the Personal Savings Rate jumped to 33.0%.In 

In Why the Amazing Leap in Savings Rate to Record 33 Percent? I list eight  reasons for the decline in spending. 

There are also a couple of reasons that income may not have risen as much as reported. Please see the link for details.

Mish

GDPNow Forecast Sinks on ISM and Construction Reports

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

GDPNow Drops to 3.8%: My Email Exchange With Pat Higgins on Volatility

Following today's income and outlays report, the GDPNow forecast took a dive to 3.8% from 4.5%. Nowcast barely moved.

GDPNow Forecast Up Huge on Positive Economic Data

The Atlanta Fed GDPNow Model forecast for 4th-Quarter GDP jumped strongly today on economic reports since November 19.

Despite Robust Retail Sales, the GDPNow Forecast of Third-Quarter GDP Declined

On Friday, GDPNow lowered its third-quarter GDP estimate from 2.3% to 2.0%

GDPNow Forecast Slips Slightly Despite Retail Sales Rebound

Despite a rebound in retail Sales the GDPNow forecast slips to 1.9 percent. Real final sales are 0.9 percent.

GDPNow Forecast Dips to 1.3 Percent: One Heck of an Inventory Adjustment

The GDPNow and Nowcast forecasts are in alignment but the details and implications are not the same.

GDPNow Forecast Surges to 4.7%: Spread to Nowcast an Amazing 2.7 Percentage Pts

Following today's ISM and construction reports, the GDPNow forecast for 3rd-Quarter GDP rose to 4.7%. Nowcast is 2.0%.

First Quarter GDP Forecast 3.4 Percent: How Many Believe That?

Yesterday, the Atlanta Fed GDPNow Model upped its forecast for first quarter GDP from 2.3% to an impressive 3.4%.