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.
Mike “Mish” Shedlock
What did Trump say?
Just keep ‘er north of .0000001 until November, then revise it to sell the Neo New Deal.
And many of Q1 numbers out will face revision(s) … bulk of revisions to the downside.
Say, where are all the resident bullz who were crowing about GDPNow when it was >+2% back in February??
King Dollar and global slowdown making trade deficit worse. From todays report-
“Year-to-date, the goods and services deficit increased $10.8
billion, or 13.1 percent, from the same period in 2015”
Love this quote from Mark Zandi last week:
“the econmy is doing very well, ignore GDP.”
What a Moron.
The stratification of America, has likely risen to such levels by now, that literally everyone Zandi has ever met in his entire life, is doing quite well. He is, after all, on the recipient end of the incessant Fed wealth transfer, that has been the overwhelming source of all wealth obtained by anyone for the past several decades.
Zandi is correct that GDP is nothing but a crock, and should be ignored. Like any other attempt to “measure” the “economy” (CPI anyone..), it serves no other purpose than giving progressives an excuse to “manage” things they have not the faintest idea about, by way of obfuscation.
You are correct
Just about any “expert”, nationally known journalist/tv teleprompter reader, S&P decision maker, DC politician a member of the top 2% club. To them everything fine with even brighter days just around the corner,
Yeah , he forgot to include ‘selectively’ before ‘ignore’.
GDP being a poor measurement of economic activity, what is the margin of error on a pie in the sky statistic like .04? Some pentagon purchase somewhere, or other .gov spending increase, like in an entitlement program?
In the end, it’s still going to cost a few packs of smokes for a taxi ride.
https://m.youtube.com/watch?list=PLuECoz9_QThTrGMI-POfgAa8femPjh0_-&v=AuPgdZeAFjA
Sorry, wrong video,,,
https://m.youtube.com/watch?list=PLuECoz9_QThTrGMI-POfgAa8femPjh0_-&v=AuPgdZeAFjA
Sorry again, the link was supposed to be the one on the 24 hour dollar crash scenario.
King Dollar going NOWHERE anytime soon.
Aha ! Stagnation !!!
(might be right, but I should put a sarc tag or full disclaimer etc. … I guess the exclamation marks give it away, but even then you might imagine some sincere reader thinking he has come across some mad analyst who thinks he has just discovered the Fed master equation .. and he might be right on the first count , but I already know the equation : 1+1 = 3 . Anyway… )
“Other than that, momentum for Fed rate hikes is looking exceptional”
Mish, you are one sarcastic guy…. thanks
Mish, have you seen this one?
Had not seen that thanks
Gee, the MSM does not seem to be informing us about the latest fleecing of the flock. Imagine that! Are our politicians intentionally trying to destroy us? Or are they really that stupid? Hanlon’s razor says go with stupidity; but it’s really hard to believe they can be that stupid.
Fire up the QE (unless they have a new improved Yellen inspired word for it now) Print a few extra Trillion send it out to the masses, raise a few million prices and VOILA! increased GDP. Simple
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