• 7 hours Trump Was Right About The Dollar
  • 10 hours Is Silver Gearing Up For A Rally?
  • 13 hours World’s Largest Hedge Fund Turns Bullish On Gold
  • 15 hours It’s Time To Spend More On Clean Energy R&D
  • 1 day Contrarian Investors Are Beating The Stock Market
  • 1 day Bulgaria’s Revenue Agency Falls Victim To Biggest Cyber Heist In History
  • 2 days Amazon Faces European Union Anti-Trust Probe
  • 2 days Commodities Are Having A Stellar Year
  • 2 days Bezos’ Next Big Project Could Be Worth $100 Billion Per Year
  • 2 days 3,600 Years Later, Climate Change Turns Mammoths Into $40M Market
  • 3 days Tesla, Apple Claim China Is Stealing Intellectual Property
  • 3 days EV Giants Duke It Out For Battery Dominance
  • 3 days Tech Billionaire Takes Aim At Google
  • 3 days Chinese Police Bust Largest Ever Illicit Crypto Mining Operation
  • 4 days Expect A Pullback Before Gold's Next Major Rally
  • 4 days Why Interest On Gold Matters
  • 4 days Ten Extravagant Food Items For The Wealthy Only
  • 5 days Why Saudi Arabia Won't Give Up On The Aramco IPO
  • 5 days $32 Million Crypto Heist Halts Tokyo Exchange
  • 6 days Is A Gold Selloff Looming?
The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

Market Sentiment At Its Lowest In 10 Months

Market Sentiment At Its Lowest In 10 Months

Stocks sold off last week…

Billionaires Are Pushing Art To New Limits

Billionaires Are Pushing Art To New Limits

Welcome to Art Basel: The…

  1. Home
  2. Markets
  3. Other

GDP at Stall Speed Once Again

Inquiring minds may be interested in the initial Atlanta Fed GDPNow Estimate for 4th quarter 2015. Here is the chart.

GDP Now Forecast 1

The ISM release on November 2 had a big impact.

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2015 is 1.9 percent on November 2, down from 2.5 percent on October 30. Following this morning's Manufacturing ISM Report On Business, the forecast for fourth-quarter real consumer spending growth declined from 2.9 percent to 2.4 percent while the forecast for real equipment investment growth declined from 3.9 percent to 1.3 percent.

GDP Now Forecast 2

I wrote about the ISM report on November 2 in Manufacturing ISM Flirts With Contraction Third Month, Employment Shifts to Contraction

Although the ISM index was the lowest reading since May of 2013, the reading was still positive (presumably showing growth).

I sometimes have difficulty predicting large moves in GDPNow estimates following economic news releases. This was one of those times.

The GDPNow model sees things this way.

GDP Model

I would have guessed a decline of 0.2% or so. Instead, the model says the ISM numbers led to a 0.6% decline.

Regardless, here we go again. The initial GDPNow estimate is already contracting, and is below the stall speed of 2.0% growth.

And the Fed, for the first time ever, now seeks to hike interest rates in December with GDP averaging a mere 2%± growth for an entire year.

 

Back to homepage

Leave a comment

Leave a comment