The Atlanta Fed GDPNow Forecast remained at +0.3% following recent economic reports.
Today’s grim housing report subtracted a bit from GDP, but the CPI which only rose 0.1% for the month added to GDP.
The net effect of the two cancelled out.
Latest forecast: 0.3 percent — April 19, 2016
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2016 is 0.3 percent on April 19, unchanged from April 13. After last Thursday’s Consumer Price Index release from the U.S. Bureau of Labor Statistics, the forecast for first-quarter real consumer spending growth ticked up from 1.8 percent to 1.9 percent. After this morning’s report on new residential construction from the U.S. Census Bureau and the Department of Housing and Urban Development, the forecast for real residential investment growth declined from 9.0 percent to 8.5 percent.
Kudos to the Atlanta Fed for highlighting intermediate effects of economic reports on their charts.
It appears the CPI added roughly 0.1% to GDP while housing subtracted roughly 0.1% from GDP.
Housing Starts and Permits Plunge
For discussion of today’s housing report, please see Housing Starts Plunge 8.8%, Permits Plunge 7.7%; Bloomberg Cites “Fundamental Strength”
What’s in Your Basket?
Do you think prices are only up 0.9% on the year?
For my take, please see Diving Into the CPI: What’s in Your Basket?
Mike “Mish” Shedlock
Bad housing numbers and inflation….Two wrongs make a right?
And the FED Chorus jumps in with the song line of
“If loving this is Wrong, then I don’t want to be Right!” la la la la
All those fioreign people flooding the markets with their with their capital flight are going to be disappointed.
The best our cheerleaders can propose is +0.3% and their margin of error is plus or minus 0.5% with historical fudge factors beyond 1%.
Auguring the entrails of a goat is all about barbecue goat for the wizard after the crowd goes home.
Hey, why’s everybody so glum, MISSION ACCOMPLISHED, they’ve done it, stagflation, rising prices without any growth, that was the goal, right? Wasn’t it?
And if they didn’t have so much hokum-pokum in the inflation calculation the true inflation would be apparent. They outfoxed themselves
Did we notice that Japanese markets are up today in anticipation of more government QE due to the recent earthquakes?
I can only imagine what a nuclear disaster and massive earthquakes would do for our GDP. Winning all the way to the grave!
Maybe they should track the undertaker’s gross sales as a leading economic indicator.
Earthquakes and Nuclear Melt-Downs are the modern day equivalent of broken windows.
When they calculate GDP, do they take into account inflation?
Send every US citizen a check for $50,000…………..problems solved.
Scot Srodes said:
We are in a deflationary death spiral because we have inflation in everything govt (i.e. taxes, fees, civil asset forfeitures, Obamacare, which is a tax, neglect, inefficiencies, fraud, etc.).
Sending a check to every American insures inflation. I have a better solution, increase interest income to 5% and reduce income tax to a flat 10%. Oh yes and end the Federal Reserve.
Michael – agreed. The government has deliberately picked winners and losers. Anyone relying on their savings has been screwed over, big time. They’ve been hung out to dry so that every person who took on too much debt could be bailed out, over and over and over again. Those who should have gone bankrupt (like the big banks) were bailed out. So wrong.
The Federal Reserve – they should be gone, never should have begun.
CENTURION – $50,000.00 to everyone? Michael is right, that would just cause inflation. People with assets would be further bailed out. It would push up prices even more. People with no assets would all rush out to spend their money, buying off the people who already own assets. So, in essence, some people who should have gone bankrupt end up winning, while the people who never had an asset end up paying more. Dumb.
GDP as presently constructed is a very bad measure.
We should focus on the growth or lack of growth in disposable income.