The Atlanta Fed GDPNow Model estimate for fourth quarter GDP surged to 3.1% from 2.1% on the basis of strong auto sales.
The latest FRBNY Nowcast for fourth quarter stands at 1.4% but it has not been updated since October 21. I expect a Nowcast update later this morning.
GDPNow 4th Quarter Forecast: 3.1 percent — November 4, 2016
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2016 is 3.1 percent on November 4, up from 2.3 percent on November 1. The forecasts for fourth-quarter real consumer spending growth and real equipment investment growth increased from 2.1 percent to 2.6 percent and 2.7 percent to 5.9 percent, respectively, after Wednesday’s motor vehicle sales release from the U.S. Bureau of Economic Analysis. The forecast of the contribution of net exports to fourth-quarter real GDP growth inched up from -0.01 percentage points to 0.05 percentage points after this morning’s international trade report from the U.S. Census Bureau.
Once again I will take the under as I do whenever GDPNow spikes.
At the beginning of the third quarter, GDPNow was a nearly a percentage point too high and also nearly a percentage point above the initial FRBNY Nowcast.
Later this morning we should have a Nowcast estimate.
Auto sales are counted when cars are shipped to dealers, not when consumers actually buy them. So it remains to be seen if that auto strength is real or not.
Mike “Mish” Shedlock