In recent months, GDP estimates from the Atlanta Fed GDPNow Model were typically way higher than those by the New York Fed Nowcast Model.

The situation is now reverse.

4th Quarter GDPNow Forecast December 8

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"The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2017 is 2.9 percent on December 8, down from 3.2 percent on December 5. The forecasts of real consumer spending growth and real private fixed-investment growth declined from 2.8 percent and 8.1 percent, respectively, to 2.5 percent and 7.0 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 November—normalized to have mean 0 and standard deviation 1 and used to forecast the yet-to-be released monthly GDP source data—declined from 1.13 to 0.47 after the report," according to Pat Higgins, creator of GDPNow.

4th Quarter Nowcast Forecast December 8

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The Nowcast model did not react to the jobs report, but the GDPNow model reacted with a 0.3 percentage point decline.

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An even bigger dive happened following the jobs report in November when the GDPNow model plunged from 4.5% to 3.3%

Dynamic Factor Volatility

In November, I pinged Pat Higgins at GDPNow asking if it the decline was wage related.

Higgins explained the model uses "something like 22 payroll employment series from different industries at various levels of aggregation and two from the household survey to estimate the dynamic factor but It doesn’t use any wage data."

For more details please see Email From Pat Higgins On the Dynamic Factor Volatility of GDPNow.

Dynamic factor volatility hit GDPNow again this month.

Anemic Wage Growth

Year-over-year wage growth in the jobs report was anemic once again. For details, please see November Jobs +228,000: Employment Only +57,000.

Mike "Mish" Shedlock

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%.

4th Quarter Forecast: Nowcast 3.2% vs GDPNow 3.3% (Down from 4.5% on Nov. 1)

Following the ISM manufacturing report, the GDPNow model upped its 4th quarter GDP forecast from 2.9% to 4.5%. Today, the Federal Reserve Bank of New York Nowcast weighed in with a 3.2% forecast. Also today, GDPNow revised its forecast to 3.3%.

GDPNow, Nowcast Near Convergence in 4th Quarter GDP Estimates

Following months of wide differences between GDP forecast models, the Atlanta Fed GDPNow and the New York Fed Nowcast models are in near convergence at 3.3% and 3.2% respectively.

GDPNow Forecast Surges to 4.7%: Spread to Nowcast an Amazing 2.7 Percentage Pts

Following today's ISM and construction reports, the GDPNow forecast for 3rd-Quarter GDP rose to 4.7%. Nowcast is 2.0%.

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%.

GDPNow Forecast Dips to 0.9%: Divergence with Nowcast Hits 2.3 Percentage Points – Why?

The Fed hiked today, smack in the face of an Atlanta Fed GDPNow Model forecast of 0.9 percent.

GDPNow, Nowcast Divergence Remains One Percentage Point

In response to poor economic data this week, both the Atlanta Fed GDPNow Model and the FRBNY Nowcast Model reduced estimates by about 0.3 percentage points.

Email From Pat Higgins On the Dynamic Factor Volatility of GDPNow

Following the ISM manufacturing report, the GDPNow model upped its 4th quarter GDP forecast from 2.9% to 4.5%. On Friday, GDPNow revised its forecast to 3.3%. An Email from Pat Higgins, creator of GDPNow explains what happened.

Massive 1.8 Percentage Point Spread Between GDPNow and Nowcast: What's Going On?

GDPNow estimates second-quarter GDP at 4.7%. The FRBNY Nowcast estimates 3.9%. Why the discrepancy?