The New York Fed released its GDP “Nowcast” today.

The New York Fed model expects 1.7% seasonally adjusted annualized (SAAR), a jump of 0.5 percentage points from last week.

The Atlanta Fed GDPNow Model says 2.5%.

Atlanta Fed GDPNow

Latest forecast: 2.5 percent — May 17, 2016

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2016 is 2.5 percent on May 17, down from 2.8 percent on May 13. The second-quarter forecast for real residential investment growth declined from 5.3 to 2.5 percent after this morning’s housing starts release from the U.S. Census Bureau, the forecast for real consumer spending growth ticked down from 3.7 percent to 3.6 percent after this morning’s Consumer Price Index release from the U.S. Bureau of Labor Statistics, and the forecast for the contribution of inventory investment to second-quarter growth declined from -0.24 percentage points to -0.39 percentage points after this morning’s industrial production release from the Federal Reserve. The latter decline was concentrated in motor vehicle and parts dealers’ inventories.

New York Fed Nowcast

Nowcast Detail

GDPNow Detail

Nowcast vs. GDPNow

Nowcast takes into consideration things GDPNow doesn’t such as JOLTS job openings, permits, and regional manufacturing surveys.

Is that valid?

Job openings can go unfilled for months or years, assuming the openings are even real. Permits are a measure of future optimism. The only activity related to permits I can think of is the cost of the permit itself.

The regional manufacturing surveys are problematic because they are diffusion indexes, not hard data. I suspect the New York Fed uses the surveys as an indication of future industrial production. That might be valid, if one could measure things properly.