GDPNow Forecast Dips to 1.9%, Nowcast Rises Slightly to 2.3%

By: Mike Shedlock | Sat, Oct 15, 2016
Print Email

It was not at all obvious how today's allegedly "solid" retail sales report would affect third quarter GDP estimates. As I have pointed out before, good reports do not necessarily translate that way. It all depends on what the models expected.

The FRBNY Nowcast expected a weaker retail sales report boosting its GDP estimate slightly.

However, the Atlanta Fed GDPNow Model expected a better retail report and its GDP forecast ticked lower.


GDPNow Latest Forecast: 1.9 Percent -- October 14, 2016

GDPNow Latest Forecast: 1.9 Percent - October 14, 2016

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2016 is 1.9 percent on October 14, down from 2.1 percent on October 7. The forecast of third-quarter real personal consumption expenditures growth fell from 2.9 percent to 2.6 percent after this morning's retail sales report from the U.S. Census Bureau.


Nowcast October 14, 2016: Highlights

Nowcast October 14, 2016


Nowcast Detail for 3rd Quarter Estimate

Nowcast Detail for 3rd Quarter Estimate
Larger Image

Retail sales added 0.042 percentage points of the 0.11 percentage point rise.


4th Quarter FRBNY Nowcast

4th Quarter FRBNY Nowcast


GDP Estimates

The 4th quarter GDP estimate for Nowcast rose from 1.32% to 1.56%. 0.133% points of the rise was due to today's retail sales report.

For Markit's estimate, please see Markit vs. ISM Services: Markit Economist Sticks with 1% Third Quarter GDP Estimate

For details of today's retail sales report, please see Retail Sales Rise 0.6% In Line With Consensus.

Given the advance in retail sales was widely expected, I did not think today's report would do too much either way to GDP model estimates.

It didn't but in a curious way, adding to the FRBNY Nowcasts, but subtracting from GDPNow.


Related Economic Reports

Finally, please take a look at what I have been doing with Real Gross Domestic Income (RGDI) and Real Gross Private Domestic Investment (RGPDI): Real GDI, GPDI Recession Indicators Take II.

Those indicators have a huge recession warning flashing right now.

 


 

Mike Shedlock

Author: Mike Shedlock

Mike Shedlock / Mish
Mish Talk

Mike Shedlock

Michael "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Visit http://www.sitkapacific.com/ to learn more about wealth management for investors seeking strong performance with low volatility.

Copyright © 2005-2017 Mike Shedlock

All Images, XHTML Renderings, and Source Code Copyright © Safehaven.com