The GDPNow Forecast took another dive today.
Latest forecast: 1.9 percent — March 14, 2018
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2018 is 1.9 percent on March 14, down from 2.5 percent on March 9. After yesterday’s Consumer Price Index release from the U.S. Bureau of Labor Statistics and this morning’s retail sales report from the U.S. Census Bureau, the nowcast of first-quarter real personal consumption expenditures growth fell from 2.2 percent to 1.4 percent.
Real Final Sales
Real Final Sales is the bottom-line estimate of GDP. That GDPNow forecast sits at 1.1%. On February 1, it was 4.1% with the Nowcast at a whopping 5.4%.
At that time I said “Take the under, way under” (in reference to a sports betting over-under line).
I believe GDPNow has messed up ISM modeling. I discussed this at least twice before, most recently on March 7 in Another GDPNow ISM Spike Fades where I shared some Emails with Pat Higgins, creator of GDPNow.
Mike “Mish” Shedlock
https://s3-us-west-2.amazonaws.com/maven-user-photos/mishtalk/economics/pY98QOHeFE2eAof6gA5bwQ/BZJ1LwzVV0OBWNr29yyuxg
I’ve always said GDP forecasts are just quackery.
No amount of cheer leading about the gain-buster Trump economy by Fox news, gleefully reporting every bonus, wage increase, or factory opening, can change the fact that the economy continues to add around 200,000 jobs/month and grow at 2%, just like Obama. Now with tariffs and even more immigrant restrictions on the road ahead even 2% is unlikely.
Again, they has been no recovery, and we don’t have anything that resembles free trade with China.
That’s not a good sign:
https://s3-us-west-2.amazonaws.com/maven-user-photos/mishtalk/economics/pY98QOHeFE2eAof6gA5bwQ/4zKPtBCJBEWYekmS7rRacA
https://trends.google.com/trends/explore?date=all&q=goldilocks%20economy
[See also data just for the United States]
But Bloomberg keeps telling us that this is a Goldilocks economy? Over and over and over again!
This report screams for two warnings to be issued: One to the report generator(s) to update their resume(s) in the event they produce a future such disgrace, and one to any potential down stream users to disregard it’s contents.
And don’t forget, this is with the Federal Government running a deficit of almost a TRILLION dollars. Not very impressive.