The GDPNow forecast took another dip today with the key item, Real Final Sales, now at 0.9 percent.
GDPNow Chart Notes
- The base forecast, and the one most observers watch but shouldn’t, is the blue line above.
- Real final sales is the bottom line estimate of the economy.
- The difference between the two line is Change In Private Inventories (CIPI) which nets to zero over time.
- RFS is not always below the base forecast. That just happens to be the case this quarter.
Here is the latest GDPNow Estimate from the Atlanta Fed.
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2024 is 1.5 percent on July 3, down from 1.7 percent on July 1.
After this morning’s releases from the US Census Bureau, the US Bureau of Economic Analysis, and the Institute for Supply Management, the nowcasts of second-quarter real personal consumption expenditures growth and second-quarter real gross private domestic growth decreased from 1.5 percent and 6.9 percent, respectively, to 1.1 percent and 6.5 percent, while the nowcast of the contribution of the change in real net exports to second-quarter real GDP growth increased from -0.94 percentage points to -0.78 percentage points.
The report is much easier to understand with a focus on the change in contribution which GDPNow creator Pat Higgins did in the second half of the last sentence above.
Contribution Change From Last Report
- PCE Goods: -0.12 from +0.05 to -0.07
- PCE Services: -0.15 from +0.97 to +0.85
- Gross Private Domestic -0.06 from +1.20 to +1.14
- Change in Net Exports: +0.16 from -0.94 to -0.78
- There were other very minor changes
The sum of the first four items is -0.17 percentage point. That’s reflected in the 0.2 drop in the forecast.
What Happened?
In short, two bad reports and one good one, all from the perspective of what the Model expected.
Point #4 is interesting. The trade deficit rose from $74.5 billion to $75.1 billion but the net export contribution increased. This is because the model anticipated an even worse forecast.
I knew trade was a wildcard when I made this Tweet ahead of the report.
The big dive turned into a smaller dip due to the model’s positive reaction to the trade deficit. But I was very confident the model did not expect the dismal ISM Report or the dismal manufacturing data.
Points #1, #2, and #3 are covered in two reports earlier today.
Severe Weakness in the Latest Manufactured Goods Report
Please see Severe Weakness in the Latest Manufactured Goods Report
Also see The Services ISM Plunges Into a Recession Forecasting Contraction
This is very recessionary data.
Retail sales plunge in blow for German economy
Slowdown in demand coincides with continued impact of worker absences on productivity
He said: “Since late 2021, Germans have missed far more work than usual due to sickness.
“Absence rates stayed above the pre-Covid-19 maximum almost every month. Less time spent at work means lower output.”
https://archive.ph/Qwxqu#selection-2933.0-2937.117
Could it be due to the Death Shots?
This chimes with experience in other countries including the UK, where 2.8m people of working age said long-term sickness is keeping them from either working or looking for a job.
Hmmmm…. now that would create lots of jobs!!!!
Food for thought https://fasteddynz.substack.com/p/the-problem-with-cheap-clean-energy
The Future Doesn’t Seem Bright Anymore…
@travisbplank
36 year old millenial here. Just want to say that it only gets worse. Don’t waste your time on work. There is nothing worth having that can be gained that way.
Ive been working and saving my whole life and every time i get close to buying a house, inflation hits, or the jobs disappear or whatever. My best friend died and I realized ive done nothing but work for other people and I have NOTHING to show for it. Nothing of value, anyway. It’s not worth it. Love people, follow your passions. Go mad and risk starvation. Suppreasing yourself for the sake of the job is not worth it. You’ll probably fail, but at least you will have TRIED for something you actually want instead of failing at something you feel you SHOULD want.
@bardofhighrenown
I feel this. Modern life is so lonely and it feels like it’s impossible to find people to connect with or who even want to try to connect. The possibility of home ownership, starting a family and even retirement are slipping away and it makes working feel like a waste of time. So many people are working to pay for things they need in order to go to work. It’s a cycle of working in order to keep working. I also feel lost and I don’t know what to do about it.
See the comments section: https://youtu.be/0DB3t0d03H4
In China, the restless unemployed youth say “Lie flat.” Don’t bother working, trying to get a house, get married etc. There’s no future.
The other expression is “Let it rot.”
https://youtu.be/0DB3t0d03H4
Exactly! What’s the point … when there is no way forward… and the world is going to collapse
Global Doom Loop
Big increases in council rates may be contributing to a rent crunch in some parts of the country.
Ōakura, New Plymouth, is top of the list with an increase of 68 percent compared to September 2020. It is followed by Marfell, in the same area, at 67 percent. Westmorland, Christchurch, is third at 66 percent and Lower Shotover, Queenstown, at 64 percent.
Wanaka also made the top 10 list, with an increase of 51 percent.
Kiwibank economist Sabrina Delgado said there was a “very strong theme” of council rates rises being passed through to higher rents.
“Ōakura was one of the suburbs which saw an over 20 percent increase in council rates last year while Marfell saw a 17 percent increase in rates.”
https://www.odt.co.nz/news/national/rates-rises-blamed-sky-rocketing-rents
We are entering the phase known as Pushing on a String.
The trillion dollars of debt every 100 days… is not longer acting as a whip to drive the beaten mule any further… whipping him harder will only kill him now.
The end game is near… the grim reaper is warming up
correct. comes a time in every world wide domination pursuit of empires…….that they take it over the edge. romans to spanish to french to soviets………….amerika was never an exception to reality.
The thing is … every country is in a similar position … f789ed.
Why is the US S&P PMI so strong? Very contradictory data.
With the inflationary depression locked in and the trillions of bogus money supporting the bloater’s various ‘assets’, it looks more like a new, improved, high tech version of medieval feudalism than a recession.
Although to many it seems unchangeable, the compounding disasters will be taking their toll more and more……
It may not last as long as some think.
I have been hearing about the inflationary depression for 50 years now. I’m still waiting. Exactly when is it going to begin?
Thursday, 14:37 GMT.
look at home ownership rates and reproductive rates of native born young amerikans. we have it in spades. the depression is both economical and mental for them. the easy peasy lives of us boomers is not possible……..at their stage in life. you are good papa dave, but you are also very wrong in this instance. we all have our lanes that we excel and fail. no big deal
Thanks for the analysis. Looks like slow growth ahead.
In 1920/1921 the Dow Transport plunged bc Ford sold more than 1.2 million cars,
a new all time high. People and farmers moved around without R/R. Thereafter wealthy people start flying. That was a systemic change. The innovators cannibalized each other. Only a few left.
In 1920/ 1921 gov support for vets was higher than the navy budget in 1923.
The rest was cut.
Tomorrow England is turning down.
England is on the precipice:
Britain is producing the smallest amount of energy on record as a plunge in North Sea fossil fuels leaves the country more reliant than ever on imports. Read More
One by one, England’s councils are going bankrupt – and nobody in Westminster wants to talk about it
One in five say they will be insolvent by next year. These local crises add up to a national catastrophe that’s about to explode
The dire predicament of councils all over England now invites an obvious question: at what point might we collectively realise that hundreds of local crises now add up to a national catastrophe? Our political culture is too Westminster-focused to follow the stories and join the dots; the dreaded term “local government” still causes eyes to glaze over. But all over the country, the picture is now the same, and things are rapidly nearing the point of complete breakdown.
Read More
At 14:37 GMT.
Exactly.
Kamala will fix this
Ladies and Gentlemen, the President of the United States and Blowjob Queen of San Francisco…
Sounds about right Better than the Pedo we have in there now I suppose At least she has some value to society
now that is some clear eyed classical thinking. we do need more BJs and less genocide. hat tip to ya fella