There was a slew of economic reports out today, and despite the fact that on the surface the reports seemed mildly positive for GDP, the GDPNow Model sees things otherwise.

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2016 is 1.7 percent on May 4, down 0.1 percentage point from May 2. The forecasts for second-quarter real nonresidential equipment investment growth and the change in private inventory investment declined following this morning’s M3 report on manufacturers’ shipments, inventories, and orders from the U.S. Census Bureau. While the forecasts for second-quarter real exports and real imports growth increased following the international trade report from the U.S. Census Bureau, the expected contribution of net exports to real GDP growth in the second quarter was virtually unchanged.

GDPNow Forecast May 4

GDPNow 2016-05-04

I expected the decline in the trade deficit would add a tick or two to GDP, but instead it added nothing.

For details, please see Trade Gap Narrows as Consumers Imports Plunge Steep $5.1 Billion.

Mike “Mish” Shedlock