In sharp contrast to a GDPNow forecast of 3.1 percent for 4th quarter GDP, the FRBNY Nowcast Model estimates 4th quarter GDP at a mere 1.6 percent.
November 4, 2016: 4th Quarter Nowcast Highlights
- The FRBNY Staff Nowcast stands at 1.6% for 2016:Q4.
- Overall positive news during the last two weeks pushed the nowcast for Q4 up 0.2 percentage point.
- Manufacturers’ shipments and ISM manufacturing survey data had the largest positive contributions in the last two weeks.
November 4, 2016: 4th Quarter Nowcast Detail
The GDPNow Forecast rose from 2.1% to 3.1% since the last estimate. 0.8 percentage points was due to auto sales.
The FRBNY Nowcast report does not even factor in auto sales.
Also note that exports added 0.019 percentage points to Nowcast, but 0.06 percentage points to GDPNow.
Once again it’s not the data per se that drives either forecast, rather, it’s the data vs. what the model predicted.
Regardless, there is a massive difference in how these models see things right now.
At least one of these models is way wrong.
Mike “Mish” Shedlock