Following another set of weak economic reports, the Atlanta Fed GDPNow Model for first quarter US GDP sank 0.3 percentage points to 0.4%.

Latest forecast: 0.4 percent -- April 5, 2016

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2016 is 0.4 percent on April 5, down from 0.7 percent on April 1. After yesterday morning's light vehicle sales release from the U.S. Bureau of Economic Analysis and the manufacturing report from the U.S. Bureau of the Census, the forecast for real GDP growth declined from 0.7 percent to 0.4 percent due to declines in the forecasts for real consumer spending growth and real equipment investment growth. The forecast for real GDP growth remained at 0.4 percent after this morning's international trade report from the U.S. Census Bureau, as a slight decline in the forecast for real net exports was offset by a slight increase in the forecast of real equipment investment growth.

GDPNow History

Kaleidoscope Eyes

Atlanta Fed president Dennis Lockhart made a speech to the Rotary Club of Savannah on March 21. His speech was called Kaleidoscopic Context for Monetary Policy.

I commented on his speech with my take called Kaleidoscope Eyes.

Momentum Since Lockhart's Speech

• On March 21, the same day as Lockhart's speech, I commented Existing Home Sales Plunge "Surprising" 7.1%, Price Concessions the Norm; What Happened? ... Data was so bad the National Association of Real Estate cheerleaders showed concern. "Know Before You Owe" kinks have been worked out. The "surprise" downtrend continues.
• On March 23, I commented New Home Sales Near Consensus on Muddle-Through Track ... It's easy to spot the lack of momentum in housing starting a year ago. This is a muddle-through track, and a weak one at that.
• On March 24, Durable Goods Orders Plunge 2.8%; Will a Falling Dollar Soon Help? ... The answer to my falling dollar question is "no". I used a chart to explain why.
• On March 28, we noted Consumer Spending Outlook Buckles with "Surprisingly Weak" Income Report
• On March 29, Fed Chair Janet Yellen reversed course and gave a Lovey-Dovey Speech Citing "Other Tools" and More QE
• On April 4, we noted Factory Orders Dive 1.7%, Core Capital Goods Dip 2.5%, Last Month Revised Lower
• On April 5, the Trade Deficit Unexpectedly Widens

Other than that, momentum for Fed rate hikes is looking exceptional.