The Atlanta Fed GDPNow Model for first quarter GDP took a dive to 2.7% today from 3.4% on February 1. Let’s investigate why.

Latest forecast: 2.7 percent — February 7, 2017

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2017 is 2.7 percent on February 7, down from 3.4 percent on February 1. The forecasts for first-quarter real personal consumption expenditures growth and real private fixed investment growth fell from 3.8 percent to 3.1 percent and 8.0 percent to 5.8 percent, respectively, following the data releases on February 2 and 3.

The above text does not explain what happened. So let’s dive into the data spreadsheets for more clues.

What Happened?

Date Major Releases GDP PCE Equipment Intellectual Property Nonresidential Structures Residential Investment Govt. Net exports CIPI 30-Jan Initial Nowcast 2.3 2.08 0.39 0.23 0.02 0.11 0.25 -0.30 -0.44 1-Feb ISM Manufacturing, Construction Spending 3.4 2.62 0.62 0.24 0.13 0.29 0.23 -0.35 -0.40 2-Feb Light Vehicle Sales 3.1 2.34 0.49 0.24 0.12 0.27 0.23 -0.35 -0.30 3-Feb Employment, Manuf. (M3), ISM Nonm. 2.7 2.12 0.41 0.24 0.10 0.19 0.18 -0.32 -0.25 7-Feb Foreign trade, Mobile homes (Feb 6) 2.7 2.12 0.41 0.24 0.10 0.21 0.18 -0.32 -0.25

Light vehicles sales took off 0.3 percentage points on February 2.

The employment report and/or the Nonmanufacturing ISM report took off 0.4 percentage points.

Today’s balance of trade report had no impact.

Back on February 1, the GDPNow forecast jumped to 3.4% from 2.3% based on construction spending and/or the Manufacturing ISM report.