The Atlanta Fed GDPNow Forecast slipped to 2.0% today following recent economic reports.

GDPNow Latest forecast: 2.0 Percent - April 10, 2018

  • The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2018 is 2.0 percent on April 10, down from 2.3 percent on April 5.
  • After the employment report from the U.S. Bureau of Labor Statistics on April 6, the nowcast of first-quarter real consumer spending growth fell from 1.3 percent to 1.1 percent and the nowcast of first-quarter real private fixed investment growth fell from 5.3 percent to 4.5 percent.
  • The model's estimate of the dynamic factor for March - normalized to have mean 0 and standard deviation 1 and used to forecast the yet-to-be released monthly GDP source data - declined from 1.43 to 0.25 after the employment report.

Earlier this morning, Bloomberg Econoday offered this thought on inventories: "One of the positives for first-quarter GDP is a major inventory build for wholesalers who are trying to keep up with sales. Wholesale inventories rose 1.0 percent in February with January revised higher to 0.9 percent. Year-on-year, February inventories were up a very sizable 5.5 percent but trailing sales which were very strong at 6.8 percent."

The Econoday comment caught me as more than a bit peculiar given the December 2017 to January 2018 percent change in sales was revised from the preliminary estimate of down 1.1 percent to down 1.5 percent.

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I noted that sales adjustment in Wholesale Inventory Build Continues as Retail Sales Flounder.

For discussion of retail sales, please see Confidence? Retail Sales Down Third Month.

With retail sales down three months in a row, exactly how and why are wholesalers "trying to keep up with sales"?

Of course it could be that Globally Bad Weather we have been talking about.

Mike "Mish" Shedlock