• 396 days Will The ECB Continue To Hike Rates?
  • 396 days Forbes: Aramco Remains Largest Company In The Middle East
  • 398 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 798 days Could Crypto Overtake Traditional Investment?
  • 803 days Americans Still Quitting Jobs At Record Pace
  • 805 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 808 days Is The Dollar Too Strong?
  • 808 days Big Tech Disappoints Investors on Earnings Calls
  • 809 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 811 days China Is Quietly Trying To Distance Itself From Russia
  • 811 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 815 days Crypto Investors Won Big In 2021
  • 815 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 816 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 818 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 819 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 822 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 823 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 823 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 825 days Are NFTs About To Take Over Gaming?
  1. Home
  2. Markets
  3. Other

3rd Quarter GDPNow Estimate a Weak 0.7% Despite Retail Sales Jump

The Retail Sales Upward Revisions will likely add a couple ticks to second quarter GDP, but overall growth still remains very weak.


GDP as Reported

  • 1st Quarter: +0.6%
  • 2nd Quarter: +2.3%

The retail sales revisions may add another 0.2% or so to second quarter, assuming there are no other changes. That's a huge assumption given the history of revisions in nearly every economic number.


Third Quarter GDPNow Estimate

Those hoping retail sales will give a huge boost third quarter GDP are likely mistaken.

The Atlanta Fed GDPNow Forecast for this quarter stands at an anemic 0.7%, down from the initial reading of 1.0% made on August 6.

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2015 was 0.7 percent on August 13, down from 0.9 percent on August 6. The previously reported nowcast of 1.0 percent for August 6 was revised down due to a minor adjustment in the method for nowcasting investment in computers and peripherals. Since a week ago, the nowcast for the contribution of inventory investment to third-quarter real GDP growth has declined from -1.8 percentage points to -2.2 percentage points. This decline more than offset an increase in the nowcast of the third-quarter growth rate in real consumer spending from 2.9 percent to 3.1 percent after the release of this morning's retail sales report from the U.S. Census Bureau.


NowCast History

Evolution of Atlanta Fed GDPNow real GDP forecast for 2015: Q3
Larger Image


Revisions in Latest GDP Report

  • First quarter 2015 revised up from -0.2% to +0.6%
  • 2013 GDP revised lower from 2.2% to 1.5%
  • 2012 GDP revised lower from 2.3% to 2.2%


Evolution of First Quarter 2015 GDP

  • +0.2% Initial
  • -0.7% Revised
  • -0.2% Revised
  • +0.6% Revised

GDP is the most lagging of all indicators. By the time all the revisions are in (years later), no one even cares.


Growth Estimate Through Three Quarters

Let's mentally bump up second quarter to 2.5% leaving everything else as reported or estimated.

The average growth through three quarters would roughly be a very weak 1.27%.

And the Fed is going to hike interest rates smack into that weakness.

 

Back to homepage

Leave a comment

Leave a comment