• 3 hours Is A Gold Breakout Near?
  • 21 hours Federal Reserve Downgrades U.S. Growth And Cuts Rate Hikes
  • 1 day Disney Beats Out Comcast In $71.3B Mega-Merger
  • 1 day The Feds Continue To Prop Up Equities Markets
  • 1 day Bejing's Sway In South China Sea Is Fading
  • 2 days Saudis Eye Billions As Stocks Get Emerging Market Boost
  • 2 days Airbnb In Acquisition Mode Ahead Of IPO
  • 2 days Gold Hangs At $1,300 Ahead Of Fed Meeting
  • 2 days Champagne Sales Slow As European Economic Worries Grow Louder
  • 3 days Putin Signs “Digital Iron Curtain” Into Law
  • 3 days Russian Metals Magnate Sues U.S. Over Sanctions
  • 3 days Tesla Looks To Jump Into Indian Market
  • 3 days Global Banks Lay Groundwork To Re-Inflate Asset Prices
  • 4 days Homeowners Experiment With Risky New Investment Trend
  • 4 days U.S. Tech Stocks Look Increasingly Vulnerable
  • 4 days De Beers To Expand World’s Most Profitable Diamond Mine
  • 4 days Ford CEO Gets Raise After Massive Layoff Round
  • 5 days Germany’s Flirtation With Recession Could Cripple The Global Economy
  • 5 days Where To Look As Gold Miners Inch Higher
  • 6 days Google Faces Billions In Fines From European Regulators
Lending: The Good, Bad, And Ugly

Lending: The Good, Bad, And Ugly

Aristotle said, “The most hated…

The Chatroom Cartel Running Global Bond Markets

The Chatroom Cartel Running Global Bond Markets

Eight major banks have been…

  1. Home
  2. Markets
  3. Other

Second Quarter GDP Forecast: Blue Chip vs. GDPNow; Where Might the Fed be Wrong?

Following yesterday's dismal retail sales report, inquiring minds may be interested in the Atlanta Fed GDPNow Forecast.

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2015 was 0.7 percent on May 13, down slightly from 0.8 percent on May 5. The nowcast for second-quarter real consumer spending growth ticked down 0.1 percentage point to 2.6 percent following this morning's retail sales report from the U.S. Census Bureau.

GDPNow vs. Blue Chip

GDPNow vs. Blue Chip

GDPNow Factors

GDPNow Factors
Larger Image

GDPNow Contributions to Growth

GDPNow Contributions to Growth
Larger Image

Where Might the Fed be Wrong?

The Blue Chip estimators appear to be in some other alternate universe, especially that 4% forecast. Instead, let's focus on the Atlanta Fed model.

In light of retail sales, I suspect PCE of +1.76 is on the high side. If so, and if inventories and exports are worse than shown (which I also expect), we are in or close to negative territory, and in recession.

Note that the NBER does not require two consecutive quarters of negative GDP to call a recession. Rather, two consecutive quarters of declining GDP is a sufficient but not necessary condition.

For further discussion please see Dismal Retail Sales Numbers Suggest Recession Likely Underway: Overall +0.0%, YoY +0.9%, Department Stores -2.2%


Back to homepage

Leave a comment

Leave a comment