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%.
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
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.