Latest forecast: 2.4 percent – July 15, 2016
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2016 is 2.4 percent on July 15, up from 2.3 percent on July 12. The forecast for second-quarter real consumer spending growth increased from 4.3 percent to 4.5 percent after this morning’s retail sales release from the U.S. Census Bureau and this morning’s Consumer Price Index release from the U.S. Bureau of Labor Statistics.
FRBNY Staff Nowcast – July 15, 2016
- The FRBNY Staff Nowcast stands at 2.2% and 2.6% for 2016:Q2 and 2016:Q3, respectively.
- This week’s news had positive effect on the nowcast pushing up the Q2 measure by 0.1 percentage point and the Q3 measure by 0.3
- The largest contributions came from manufacturing data, in particular capacity utilization and industrial production.
Nowcast 2016 Q2
Nowcast 2016 Q2 Detail
- The GDPNow model ticked up largely because of retail sales and the CPI but those had almost no impact on Nowcast.
- Nowcast takes into consideration regional manufacturing reports but GDPNow doesn’t. The effect this week was negligible.
- Industrial production and capacity utilization were the big contributors to Nowcast.
- Retail sales had almost no impact on Nowcast (+0.005) because the gain was largely expected.
- Data revisions (all revisions) took off 0.035 percentage points, most likely led by negative retail sales revisions for May.
- The retail sales report was not as “fabulous” as appeared at first glance.
- Industrial Production Jumps 0.6%; Has Manufacturing Turned?
- June Retail Sales Jump 0.6% from Revised May Sales of 0.2% (0.3% Lower)
Key Modeling Idea
It is not the data itself that matters, but rather how well the data did vs. the forecast for that data.
For discussion, please see My Conversations with New York and Atlanta Fed Senior Economists on Their GDP Models.
Mike “Mish” Shedlock