Pat Higgins at the Atlanta Fed has posted his initial forecast for fourth-quarter GDP.
GDPNow Initial Forecast
Latest estimate: 2.3 percent — October 27, 2023
The initial GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2023 is 2.3 percent on October 27. The initial estimate of third-quarter real GDP growth released by the US Bureau of Economic Analysis on October 26 was 4.9 percent, 0.5 percentage points below the final GDPNow model nowcast released on October 25.
The Atlanta Fed has had a hot hand in forecasting beating the Blue Chip forecast and the Econoday consensus. The latter was 4.2 percent, 0.7 percentage points under the mark.
Blowout 4.9 Percent Increase in GDP But Real Disposable Income Declines 1.0 Percent
For discussion of third-quarter GDP, please see Blowout 4.9 Percent Increase in GDP But Real Disposable Income Declines 1.0 Percent
And for more on disposable income, please see Real Disposable Personal Income Drops for the Third Month But Spending Jumps
I was hiking for nearly 8 hours on Saturday – then a 5.5 hour drive home.
Just had the chance to approve some comments
Forecasts are simply best guesses given the data available. People here who complain about forecasts always being wrong, deliberately manipulated, or outright lies should stop paying attention to them. Or perhaps publish their own forecasts, since they seem to know better.
I take all forecasts for what they are. If you follow all the data and all the forecasts, and combine it with your own personal outlook, you can then make your investment decisions. Some of which I frequently mention here.
Funny that I don’t see the same from others. Considering how confident they are in their criticisms. Where is their confidence to state their investment ideas? Now, not everyone is afraid to share their forecasts. There were a few brave souls who confidently predicted $40 WTI this year. Though, they seem to have disappeared from the comments section. Just like those who predicted a Maunder Minimum and global cooling. Where are they now?
Right on!!!
“It’s tough to make predictions, especially about the future.” — Yogi Berra
Global Cooling is coming.
Tho it’s hard to predict.
Usually it is cooler during the nighttime.
The initial GDPNow Forescast is worthless, typically off by at least one percentage point, usually too high
The GDPNow forecast only becomes useful at the end of the quarter, three weeks before the official advance Real GDP announcement. Since the auarter has already ended, I suppose it is no longer really a forecast.
The more they under state inflation, the higher the GDP!
Lies, Damn Lies, Statistics, Government Statistics.
Everyone seems to forget Fed latency, it’s been just over 1-1/2 years since the first hikes.
Everything from mortgage payments, credit card payments, to Margin & borrow fee’s for trading institutions goes up & it generally takes 1-1/2 years to start taking affect.
I’d say this has a lot to do with Bill Ackman getting out of treasury shorts, they’ll start changing course ahead of the Fed.
..
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With car companies reporting huge losses on EV’s they built, they will have to make huge EV production cuts sooner than later. That’s going to have a measurable impact on the economy.
Suddenly everyone will get religion and rush out to buy EVs for Christmas.
Party is over. 4th qtr. R-gDp will be bad.
Party is continuing on the second floor with shades drawn.
Per GDPNow, their initial Q3 data point was 3.5% and ended up 1.4% higher.
Consequently, I would fully expect this number to climb higher as the quarter progresses. As far as I can tell, since Q4 hasn’t started yet, this is simply an initial SWAG and doesn’t have subcomponent release data associated with it.
Last, I really wonder what this lowered initial estimate is the result of? With Ford being on cusp of signing a UAW contract, I’d expect that the UAW’s strike drag on GDP will be muted, especially if GM & Stellantis fall in line soon.
When is the widely anticipated recession going to arrive? It seems that the economy has not really slowed as anticipated…..
Interest rates at barely half the true rate of inflation are free money economic stimulus.
October 26th, his NowCast was 5.4% for Q3
October 27th he is now casting 2.3% for Q4
So he is now expecting a 3.1 percentage point drop off his GDP nowcast from Q3 to Q4 based on one day of data. That is huge! What is driving this?
Ok, so I now realize that the Q4 reading is based on more than one day of data. Same point though – did the bottom drop out of the economy or is there something in his methodology that explains this drop?
They finally got their call-back from the California Psychics Network.
Stupidity.
How often has the Fed made correct GDP predictions? Any better than a coin toss? That’s a serious question Mish can address. Do an analysis of the Fed’s quarterly predictions for the past 10 years and see how they’ve done.
Markets top on good propaganda, and bottom on the truth.
“the average absolute error of final GDPNow forecasts is 0.83”
According to them, at least.
https://www.atlantafed.org/cqer/research/gdpnow#:~:text=Since%20we%20started%20tracking%20GDP,forecasts%20is%201.23%20percentage%20points.