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.

GDPNow 2016-08-12

FRBNY Nowcast 2.4% — August 12, 2016

Nowcast 2016-08-12A

FRBNY Nowcast Detail — August 12, 2016

Nowcast 2016-08-12B

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