by Mish

The GDPNow forecast is up from July 14, but way lower from the preceding cast. Meanwhile, the Nowcast inched back above the two percent mark for the first time since June 9.

The overall tendency at this point is convergence at or slightly above two percent.

GDPNow Latest forecast: 2.5 percent — July 19, 2017

“The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2017 is 2.5 percent on July 19, up from 2.4 percent on July 14. The forecast of second-quarter real residential investment growth increased from -1.6 percent to -0.6 percent after this morning’s new residential construction report from the U.S. Census Bureau.”

FRBNY Nowcast Latest forecast: 2.0 percent — July 21, 2017

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GDPNow Contributions to GDP Estimates

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I have been in contact with Pat Higgins, the creator of GDPNow several times in the past week over various issues.

At the top of the heap is the GDPNow forecast for nearly a two percent contribution from Personal Consumption Expenditures (PCE) despite the fact that retail sales are down and things like food stamps will not change much.

As has always been the case, Pat was generous with his time in explaining the model.

Most of the numbers in his contribution forecast seem to make sense. The two wildcards on my mind are CIPI and PCE.

CIPI is “change in private inventories.” I seriously question the value of inventory on auto dealers’ (new and used) lots. In addition, inflation is headed lower overall, if one accepts numbers from the BLS.

Perhaps my simple model is too simple. I am going to play around a bit with PCE to see what I can come up with.

At the beginning of the quarter, I was sure the initial GDPNow forecast was wildly off base. Something on the order of two percent is at least in the ball park.

The more I study this, the more everything seems like one big crap shoot, especially with massive revisions from the BEA and commerce department out of the blue on top of questionable deflators of PCE inflation that seldom match CPI inflation.

Mike “Mish” Shedlock

First Quarter GDP Forecast 3.4 Percent: How Many Believe That?

Yesterday, the Atlanta Fed GDPNow Model upped its forecast for first quarter GDP from 2.3% to an impressive 3.4%.

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%.

GDP Forecasts: GDPNow 3.4%, Nowcast 1.9%

The GDP forecasts by the Atlanta Fed GDPNow model and the New York Fed Nowcast are once again not in the same ballpark.

Nowcast, GDPNow 2nd Quarter Forecasts Narrow Slightly: What’s Ahead?

On Friday, both the Atlanta Fed and New York Fed updated their GDP 2nd quarter forecasts. The FRBNY Nowcast remained at 1.9% while GDPNow dipped to 2.7% narrowing a once gigantic spread to 0.8 percentage points.

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, FRBNY Nowcast Inch Up: Gap Still Two Percent

Te Atlanta Fed GDPNow Model inched up to 1.0% from 0.9% on Friday. Nothing much mattered since a week ago.

First Quarter GDP Second Estimate 1.2 Percent: Mish vs. Consensus

This morning, the BEA revised its estimate of first-quarter GDP to 1.2% from 0.7%. The Econoday consensus estimate was 0.8%, in a range of 0.7% to 1.0%.

GDP Forecasts Dip Again: Forecasts Compared

In the wake of dismal retail sales, first-quarter GDP forecasts by the Atlanta Fed GDPNow model and the FRBNY Nowcast model ticked lower.

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

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