"No warning can save people determined to grow suddently rich" - Lord Overstone

  • 2 hours Why Silicon Valley Is Ditching Wall Street
  • 3 hours The Amazon Effect On Housing Markets
  • 4 hours Big Banking Is Losing This $600 Billion Industry
  • 5 hours Pump And Dump Schemes Take Over Crypto Markets
  • 6 hours Is Gold A Commodity Or Currency?
  • 7 hours The Three Biggest Threats To Bitcoin
  • 9 hours The Calm Before The Storm In Tech Stocks
  • 10 hours Japan Scrambles To Dodge Trump’s Trade War
  • 1 day Big Banks Double Down On Crypto Ambitions
  • 1 day Investor Debt Outpaces S&P 500 Growth
  • 1 day Will Bitcoin Ever Dethrone Gold?
  • 1 day China's Orwellian Social Media Machine
  • 1 day What Sparked Russia’s Gold Buying Spree?
  • 1 day The War For "White Petroleum"
  • 1 day Stock Market Bulls Are Running Out Of Steam
  • 1 day Crypto Stocks Poised To Bounce Back
  • 2 days The Five Biggest Bubbles In Stock Market History
  • 2 days Was Finland’s Universal Basic Income Program A Failure?
  • 2 days China Goes Long On Gold
  • 2 days Is It Wise To Trade The Trump Effect?
Financial Sector Reports Record Profits

Financial Sector Reports Record Profits

The financial sector had a…

Is It Wise To Trade The Trump Effect?

Is It Wise To Trade The Trump Effect?

President Donald Trump has an…

New York Fed Nowcast Up to 2.4% (I'll Take 'The Under'); Modeling Error on Unemployment Rate?

Following today's reports on factory orders, international trade, jobs, and two reports on services, the New York Fed GDP Nowcast rose 0.2 percentage points to 2.4%.

If 2.4% is the over-under line, I'll take the "under".

  • The FRBNY Staff Nowcast is above 2% for both 2016:Q2 and 2016:Q3.
  • Conflicting news over the week had on net a slightly positive effect on the nowcast.
  • The largest positive contributions came from real personal consumption expenditures and the ISM manufacturing release.


2nd Quarter Nowcast

2nd Quarter Nowcast


Nowcast Details

Nowcast Details
Larger Image


Positive and Negative Factors

The biggest positive factors since the May 27 report were personal consumption expenditures, the manufacturing ISM, and the unemployment rate.

The largest negative factor since the May 27 report is construction.

I have comments from both the Atlanta Fed and New York fed from last week on their models, and I hope to report on them next week. I intended to do that this week but there has been lots of data in a shortened work week.


Modeling Error on Unemployment Rate?

I suspect the the New York Fed has a small modeling error in the civilian unemployment rate.

In general, it's logical to presume a decline in unemployment likely is a positive factor for growth, but I also propose one needs to look at why the rate declined.

Today, the unemployment rate dropped because close to half a million people dropped out of the labor force.

Moreover, there was a massive jump in involuntary part-time work of 468,000. Neither of those can remotely be considered positive for spending or GDP.

For details on today's job report, please see Fed Hiking Not: Payroll Jobs +38K, Employed +26K, Labor Force -458K, Revisions -59K.


Four GDP Estimates

  1. New York Fed Nowcast June 3: 2.4%
  2. Atlanta Fed GDPNow June 1: 2.5% GDPNow Forecast Dips to 2.5% Following Construction Report
  3. Markit June 3: 0.7% to 0.8% Composite PMI Flirts With Contraction; Markit Chief Economist Estimates GDP 0.7-0.8%
  4. ISM June 3: 1.6% Non-Manufacturing ISM Much Weaker Than Expected

The estimate average is 1.8%.

Looking ahead, I see weakening employment and weakening commercial construction. For details please see Construction Employment Declines Back-to-Back First Time Since May 2012; Questions of the Day.

 

Back to homepage

Leave a comment

Leave a comment