The base nowcast is -0.4 percent down from -0.1 percent on April 17.
Gold Adjustment Background
Pat Higgins at GDPNow has made official adjustments to its model to account for gold imports.
The base model doesn’t adjust for gold imports/exports but the BEA does.
Gold bars and bullion are considered financial assets and gold imports have soared along with other imports, front-running tariffs.
For discussion, please see my March 27, 2025 GDPNow Discussion.
The gold-adjusted numbers are the ones to follow. Starting February 28, my chart only shows the adjusted numbers.
Latest Developments
- New home sales took 0.1 percentage points off the Nowcast but nothing off Real Final Sales.
- Existing-Home sales took 0.2 percentage points off the Nowcast and 0.1 percentage points off Real Final Sales.
The Number to Watch
Real Final Sales is the important number. The difference between the Nowcast and RFS is inventory adjustment that nets to zero over time.
Looking ahead I wonder about inventories because of all the tariff front-running of parts and general merchandise from highly-tariffed nations.
Observations
We are now ending the data collection for the first quarter. The Nowcast is negative and I don’t expect much movement because the key reports are now all in.
The final Nowcast for the quarter is on April 29. The BEA releases GDP numbers for the first quarter on April 30.
Related Posts
April 24, 2025: New Home Sales Allegedly Rise 7.4 percent, This Likely Didn’t Happen
Let’s discuss bogus numbers and bogus reporting.
April 24, 2025: Existing-Home Sales Plunge 5.9 Percent, NAR Claims “Solid Footing”
Credit NAR chief economist Lawrence Yun for the Hoot of the Day.
April 25, 2025: Consumers Have Bleak Outlook on the Economy, Inflation Expectations Surge
Inflation expectations are the highest since 1981. Stagflation anyone?
Considering that demand has been pulled forward by the on again-off again tariffs, reasonable people can see that GDP and tax revenue are likely to fall hard against a backdrop of shortages of rare earths for defense and other basic supplies for our daily lives.
Volvo laid off 800 because of an air pocket in demand for their long-haul trucks.
Meanwhile trump campaigns for lower interest rates and a flood of liquidity.
This is the same disastrous recipe as when trumps covid crash happened!
Who does trump work for?
Observe that Russia is disregarding the sanctions and China has stopped all U.S. natural gas imports and diverting them when contracted deliveries arrive. China and Putin are making arrangements for a massive natural gas pipeline from Russia to Chinese markets. Trump calls this winning? For whom?
Russia and China are making deals all over the world while trump twists in the wind waiting for phone calls.
At this rate trump will accomplish negative 5% GDP and set records for inflation.
this will be the worst depression we’ve experienced since the 30s. stagflationary isolated amerika here we come. i suspect most people here besides some isolated pockets like detroit and phoenix have not experienced home prices cut by 70%………
Home prices will continue to rise. This will be an inflationary recession or worse.
Mish,
You always reference the GDPNow forecast, especially now that it is negative.
Why do you never reference the St. Louis or NY Fed Nowcast forecasts?
They show 3.07% and 2.6% growth respectively.
I have no idea which one will be more accurate, nor do you, but you always cite the odd one out.
It’s akin to cherry picking data, only in this case you’re cherry picking one GDP forecasting model.
I used to post NY Fed Nowcast up to the time they discontinued i (for a very long time). Not even aware they restarted it.
It was wildly wrong when they did. I don’t always cite the “odd one out” I have only cited GDPNow (good or bad for years).
And Check out the Blue Chip[ Forecast on GDPNow. If I could download that data, I would gladly post it.
https://www.atlantafed.org/cqer/research/gdpnow
Your comment is very off base.
My comment isn’t off base at all. I’ve been reading you for many years now and always appreciate your insight. I’m not one who thinks you have TDS, but I do think you’re a bit harsh towards Trump. I can’t think of a single time you’ve ever cited any other GDP forecasting model and now you seem to do it with every negative update by the Atlanta Fed. I’m surprised you aren’t even aware that the NY Fed has restarted their model yet. Perhaps the NY Nowcast is wildly wrong, but if so, so is the St. Louis Fed Nowcast model. Either way, at least reference all three models instead of the one that suits the message you seem to be trying to drive into your reader’s heads. With that said, I have no doubt that if this Trump tariff war on the world continues as is, our economy will be negatively impacted. You seem to be trying to drive that home with first quarter the GDP forecasting model from the Atlanta Fed. Trump’s tariffs didn’t peak until April 2 and have gyrated back and forth like a bipolar schizophrenic ever since. Who the heck knows what the economic impact will be. I know one thing, it won’t be as bad as some say and it won’t be as immaterial as other say. It’s bound to be somewhere in the middle. Trump has exempted so many products from tariffs and changed his mind so many times, I don’t think he even knows what the hell he wants to do. I’m not being defensive to you as I give Trump far more criticism than I do praise, but I’m neutral in my assessment of the crap he does. If he achieves his goal of negotiating more favorable trade deals with our major trading partners, it benefits all Americans. In the end, I have no doubt he will. I don’t neccesarily agree with his overly heavy handed methods, but at least he’s doing something no president has tried to do for 100 years. Then again, that didn’t turn out so well. I appreciate your insight and wisdom, but I think it is fair to say that you are far more critical of Trump than most people who don’t vote in order to remain neutral.
@Naet, I agree with most of what you wrote, but regarding GDPNow I think you got something wrong. Mish tracks and reports on the Atlanta Fed GDPNow, for years, because it has a good track record and he understands it. I believe he’s discussing it now, not because it suits a narrative, but because it’s the one he always (and only) discusses.
As for the New Kids on the Block (the NY and St. Louis nowcasts): personally I don’t trust the NY Fed at all, given who owns it and its historical biases. I don’t know the St. Louis Fed so well. But until they’ve proven they tend to match the actual GDP reports, I don’t see any reason to give equal weight to the NY Fed or St. Louis reports when the Atlanta GDPNow does the job already. I suppose it might be worth better understanding the differences among the 3, but I support Mish in using “the one that works” and not worrying overmuch about over copycats that may just be “chaff”,
“but at least he’s doing something no president has tried to do for 100 years.”
The reason no President has behaved toward our allies and trading partners like trump is, is because of the long history of tariffs failing to support debtor nations. No president has been a malignant narcissist either, and destroying our present economy for headlines does not increase the chances for paying down debt.
GDP will fall precipitously along with tax revenues.
The “suspended reality” of the WWF mentality that voted for trump will not prevent real damage trump is doing to our nations reputation or our economy.
Ask yourself how many Americans want to go back to working in sweat shops or textile mills?
We exported those bottom feeder jobs for good reason and have benefitted immensely by exporting dollars as the reserve currency and maintaining banking dominance and high return economic activity.
These tariffs are regulatory over-reach and destroy relationships, jobs, profits and tax revenues.
As counterpoint, I think your criticism of Trump is spot on. Central planning doesn’t work, we have centuries of failed central planning examples. If any commenter is ever confused about policies, the one thing we know for 100% certainty it’s that central planning doesn’t work.
It won’t work now even if people believe Trump is the orange messiah.
While free trade and free markets aren’t 100% efficient, they are the best thing we have for now.
bully bully. read some anthropology and evolution of mankind over past 10,000 years. the free market societies with trading hubs always fared better than central planning by some ruling class trying to control the flow of trade. humans are pretty predictable.
In Newport Beach, CA, home sales slowed drastically when the stock market started shaking. Suddenly, in the last few days, home are selling again. The sales slowdown only lasted about 3 weeks and was just a blip.
Maybe if you put that observation under an electron microscope, you can get your sample size small enough that it will be LITERALLY meaningless.
But Hegseth’s constant posting of his athletic feats has given them an overly eager, thirsty quality. In some ways, he reminds me of my spy-obsessed 6-year-old, who, desperate to be a covert operative, is constantly whispering into her oversize spy-gadget watch and shouting staticky instructions into her walkie-talkies. But unlike my daughter, who is in kindergarten and is decidedly not a real-life spy, Hegseth is actually the defense secretary, making his constant performance of the role feel gratuitous. HAT TIP ASHLEY PARKER
Trump’s first economic report card.
That would be an “F” Tony.
Trump is failing economics 101
Elections have consequences.
Florida land boom was destroyed by “Miami” hurricane 1926 and by “Okeechobee” hurricane 1928. Fl vacation homes and RE were destroyed. Coolidge didn’t care. He didn’t care when MA and VT were destroyed by flood. He was fully committed to cutting debt. Yet the people of VT and western MA supported him. The elite and the puke media hated him.
Coolidge was born in Plymouth Notch, VT, attended school in Ludlow, VT, and matriculated to Amherst College. He practiced law in Hampshire County, MA and married a Vermont girl before going on to be a Massachusetts legislator, then MA Governor. Cooledge lived in Northampton most of his life and was Mayor of the small city. His Presidential Library in Northamptom, Massachusetts is worth visiting.
Don’t you think the two New England states should have rooted for their boy – or maybe I misunderstood your comment?
He isn’t here to make sense, just to hear his own polemic screeds
There’s plenty of liquidity in the economy. In fact, the money stock is growing too fast. But there’s certainly uncertainty. Trump, as a politician, is supposed to garner a consensus before making any changes.
Consumer confidence at 65.2 is at a 12-year low. Welcome to his paralysis.
Not sure where you’ve been living your whole life, but U.S. politicians don’t need consensus to make changes, only a sufficient majority. Consensus building only needed when power is split more evenly than it is now.
Great video from reventure app on the Florida real estate collapse. Trump’s Canada talk has Canadian selling their Florida homes, plus soaring HOAs, insurance, maintenance and repairs all taking their toll on Florida. Wait till lumber, labor and materials become super expensive….it’ll be the Trumpocolypse™
https://www.youtube.com/watch?v=mkaDDwm9LKY
SPX gap lower in Apr. If Apr low (Jan 2022 high) will be breached ==> more gaps, larger gaps, down the road. Techno Fanda are not for schizo people with large gaps in their brain, like bmc^2.
It’s like clockwork. Every Republican administration since 1920 has had a recession begin on their watch.
Though I would not have guessed that Trump would try this hard to get a recession so quickly. It should be well underway before year end thanks to his tariff war on the rest of the world and the uncertainty it creates.
Looking forward to auto parts tariffs on May 3, unless he delays them for a third time. Once auto parts tariffs begin, the NA auto industry will largely shut down within 2 weeks.
Trump supporters will cheer that this is all part of the plan.
What a show!
If Trump does not reverse auto tariffs all hell will break lose.
It may be too late already, port traffic is miserable.
Many imports from China masked through Vietnam or Mexico. So the new Vietnam rate will be important too.
At 46% there are no realistic avoidance maneuvers.
It is too late, Volvo laying off 800 citing tariffs.
https://www.usatoday.com/story/money/business/2025/04/18/volvo-layoffs-tariff-troubles/83166252007/
“Heavy-duty truck orders continue to be negatively affected by market uncertainty about freight rates and demand, possible regulatory changes, and the impact of tariffs,” a spokesperson for Volvo Group North America said in an emailed statement.
“We regret having to take this action, but we need to align production with reduced demand for our vehicles.”
I would expect Trump to delay auto parts tariffs yet again. He will describe it as “being nice”.
Shutting down the entire NA auto industry for any length of time will hasten the arrival of the recession.
Unless, as his supporters keep saying, a recession is all part of his plan.
I conclude the economy was so poor by election day that incoming Republicans were left holding the bag. It will take more than 100 days to turn around a nation’s economy. Milei took similar drastic actions to Argentina’s swamp. It took almost a year to see the economy turn around.
Lol! Milei was elected to try to fix the economic mess caused by Argentina’s imposition of tariffs and trade restrictions that were imposed in 2011. These policies crippled the Argentine economy.
Milei is a free trade advocate. Here is a quote from a speech he made.
“We need to give back to Argentines the freedom to trade with whomever they wish, so that goods and services can enter the local market and everyone can freely buy better quality products at a better price. For decades, under the premise of protecting a handful of jobs, the cost of living was deliberately made more expensive for millions of Argentines. In many cases, even forcing them to purchase goods of dubious quality at completely distorted prices. It is not fair that only those who can afford a trip abroad can buy what they want at international prices. It has to be for everyone. Opening markets will also open the doors of the world to Argentine companies so that they can sell our products to 8 billion people, in an international context where what Argentina has to offer will be in great demand.
“I also want to put an end here to another fallacy, which they have been using to lie to us for almost a hundred years, and that is the issue of the infant industry, an infant that is at least 90 years old. Or, let’s say, to protect industry X, because it generates jobs. That is also another lie. Because if in the process of opening up the economy, a better quality or better-priced product enters and a company goes bankrupt, it is also true that consumers now have more money in their pockets and can spend it in other sectors of the economy. Therefore, employment will be reallocated and will go to sectors where it is more productive and where there are higher wages and, therefore, there is greater welfare for all. Therefore, enough of the protectionist lie, because, in the end, it is nothing more than a scam between politicians and rent-seeking businessmen.”
https://www.cato.org/blog/milei-free-trade
But I thought Republicans were the party of fiscal responsibility?
The booms plan the seeds of their future destruction. One party gooses the economy with short-sighted policies that create unsustainable bubbles. Then, when the time comes to fix the imbalances, recessions occur.
The recessions of 1982 and 2001 were baked-in by the excesses of the 1970s and 1990s. The incoming recession is no different.
FedGov has been running deficits at 6% of GDP for years on end. That cannot continue because of the inflation and interest costs. Trimming the deficit back to a sustainable level implies a reduction in GDP which is the definition of a recession. This ain’t rocket science.
The solution is not $4.5 trillion in tax cuts and destruction of the economy and tax revenues as trump and his henchmen are doing to us.
The solution is free trade and a booming economy with increased tax revenue.
Tariffs have never been the solution for debtor nations. Tariffs are the mark of a coward leader that is sure to fail. Trump bankrupted casinos and is on his way to bankrupting the U.S.
His actions are rewarding a few insiders and imposing his family as oligarchs with him as “Dictator on day one”.
But, But!
You don’t think that the $25 billion in politically motivated hacks by DOGE and the $1 billion in cuts to Fish and Wildlife will cover the $4.5 trillion in tax cuts?
Trump and his Repugnican thieves & liars do.
Elections have consequences!