by Mish

GDPNow Latest Forecast: 3.7 Percent — August 4, 2017

"The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2017 is 3.7 percent on August 4, down from 4.0 percent on August 3. The forecasts of third-quarter real consumer spending growth and real fixed investment growth declined from 3.0 percent and 5.2 percent to 2.8 percent and 4.1 percent, respectively, after this morning’s employment report from the U.S. Bureau of Labor Statistics. The model’s estimate of the dynamic factor for July—normalized to have mean 0 and standard deviation 1 and used to forecast yet-to-be released monthly GDP source data—decreased from 0.64 to 0.27 after the report."

GDPNow Contribution Estimates

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Nowcast Latest Forecast: 2.0 Percent — August 4, 2017

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Nowcast Week Ending August 4, 2017 Highlights

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  1. The New York Fed Staff Nowcast stands at 2.0% for 2017:Q3.
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  3. Positive news from the ISM manufacturing report and from labor market data was only partly offset by negative news from consumption and construction data.

Mish Comments

Once again there are wild discrepancies between the forecasts, and once again GDPNow’s initial forecast of 4% is not believable.

For the second quarter, GDPNow’s initial forecast was 4.3% (off by 1.7 percentage points). GDPNow’s final forecast was 2.6%, right on the mark.

The final Nowcast estimate for the second quarter was 2.0%. For the quarter, Nowcast never rose above 3.0%.

What tends to happen is initial forecasts from GDPNow drop over time. The models also tend towards convergence but this is a very large gap to fill.

At the moment, at least one of the models is way wrong.

Mike “Mish” Shedlock

3rd Quarter GDP Estimates Collapse

In the wake of today’s economic reports, third-quarter GDP estimates from the Atlanta Fed GDPNow model and the New York Fed Nowcast model each plunged 0.8 percentage points.

GDPnow, Nowcast Boost Fourth-Quarter GDP Estimates

GDPNow upped its 4th-quarter GDP estimate to 3.3% from 2.9% a week ago. Nowcast upped its forecast to 4.0% from 3.9%.

1st Quarter GDP Estimates: ZeroHedge, Mish, GDPNow, Nowcast, ISM, Markit

On Friday, April 28, the BEA will release its preliminary estimate for first quarter GDP.

Nowcast Leapfrogs GDPNow in 1st Quarter GDP Forecast

The latest first quarter GDP estimate by the New York Fed Nowcast jumped to a new high of 3.1%.

Dueling GDP Estimates: GDPNow vs. FRBNY Nowcast

Both the Atlanta Fed GDPNow and the New York Fed Nowcast updated their models today. Let’s take a look at where they stand for second-quarter GDP.

FRBNY 4th Quarter GDP Nowcast 1.6% vs. GDPNow 3.1%

In sharp contrast to a GDPNow forecast of 3.1 percent for 4th quarter GDP, the FRBNY Nowcast Model estimates 4th quarter GDP at a mere 1.6 percent.

Investigating Curious Anomalies in GDPNow and Nowcast GDP Estimates

As of last Friday, the Atlanta Fed GDFPNow model for the second-quarter GDP stood at 3.4%. In contrast, the FRBNY Nowcast report was 2.2%.

Third-Quarter GDP Forecasts: GDPNow 2.5%, Nowcast 1.5%

The volatility of GDPNow vs Nowcast is once again on display in recent weeks.

GDPNow 3rd Quarter Estimate Ticks Down to 2.8%: Looking Ahead, What’s in Store for the Forecasts

In the wake of today’s durable goods report and last week’s housing reports the Atlanta Fed GDPNow Model for third quarter GDP ticked down 0.1 percentage points to 2.8%.