The GDPNow Model and the FRBNY Nowcast Model each declined 0.2 percentage points following today’s economic reports.
The models remain a very wide 1.1 percentage points apart.
GDPN Latest forecast: 3.5 percent — August 12, 2016
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2016 is 3.5 percent on August 12, down from 3.7 percent on August 9. After this morning’s retail sales report from the U.S. Census Bureau, the forecast for third-quarter real consumer spending growth declined from 3.7 percent to 3.4 percent.
FRBNY Nowcast 2.4% — August 12, 2016
FRBNY Nowcast Detail — August 12, 2016
Of the weekly Nowcast decline of 0.2 percentage points, today’s “Solidly” Flat Retail Sales numbers accounted for -0.135 points.
The PPI report accounted for about half of the rest. For details, please See Collapse in PPI Services Final Demand for Apparel, Jewelry, Footwear.
At least one of the two models is way wrong.
Mike “Mish” Shedlock
Why is GDPNow such an outlier? Aren’t they usually more pessimistic than the consensus?
Good question
I was waiting to see if the models at all converged – but they didn’t.
If there is a bad retail sales number next month, Nowcast will drop under 2% (all else being equal – but it won’t be equal if sales are bad – so it could be much worse).
I believe this is the answer “After this morning’s retail sales report from the U.S. Census Bureau, the forecast for third-quarter real consumer spending growth declined from 3.7 percent to 3.4 percent.”
Sounds high to me
Still don’t get it.
One says ‘poetaytooe’. The other says ‘poetahhhtoes’.
And they get paid for it, too.
Or, to put it another way, could an astrologer who never bothered to learn astrology very well do better?
Answer: depends on your definition of ‘better’. With respect to accuracy, 50-50. With respect to being paid for it, the Fed wins, unless the partially trained astrologer wins a Nobel prize by pretending to be an economist. Then the entrepreneur gets to consult with foreign central banks. Big bucks follow.
I’ll stick with my forecast of 1%. They won’t let it go negative and Obama will never hit 3%.
The economy stinks and will continue on this path as long as the Fed maintains the artificially low rates.
quarterly GDP growth has been over 3% 8 times since Obama has been in office; there have been low interest rates in each of those quarters also.
GDP forecasts always sound like it’s done by a real estate salesman, “it always goes up, everybody knows that”. (especially in an election year… pay no attention to the man behind the curtain).
Maybe they should consult w/ Nate Silver as their arbiter of records.