GDPNow and Nowcast GDP estimates came out today. I believe the GDPNow estimate is closer to the right track.
The GDPNow forecast continues its trend of “falling like a rock” over the course of a quarter. Meanwhile, “I am a Rock” best describes the Federal Reserve Bank of New York (FRBNY) Nowcast.
GDPNow Latest Forecast: 1.8 Percent – March 23, 2018
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2018 is 1.8 percent on March 23, unchanged from March 16.
After this morning’s advance durable manufacturing report from the U.S. Census Bureau, the nowcast of first-quarter real nonresidential equipment investment growth increased from 5.8 percent to 6.2 percent and the nowcast of the contribution of inventory investment to first-quarter real GDP growth decreased from 0.72 percentage points to 0.66 percentage points.
The nowcast of first-quarter real residential investment growth increased from –3.1 percent to –1.6 percent after Wednesday’s existing-home sales release from the National Association of Realtors, but fell back to –2.4 percent after this morning’s releases on new-home sales and construction prices from the Census Bureau.
Nowcast Latest Forecast: 1.8 Percent – March 23, 2018
The New York Fed Staff Nowcast stands at 2.9% for 2018:Q1 and 3.0% for 2018:Q2.
News from this week’s data releases increased the nowcast for both quarters by 0.2 percentage point.
A positive surprise from manufacturers’ inventories and the positive impact of data revisions accounted for the increase.
Musical Tribute
Take the GDPNow forecast as a reasonable over-under bet. The Nowcast seems way too high.
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