Despite poor but not horrendous economic reports today, the Atlanta Fed GDPNow model forecast for first quarter GDP ticked up slightly today, from 2.4% to 2.5%.
Latest forecast: 2.5 percent — February 27, 2017
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2017 is 2.5 percent on February 27, up from 2.4 percent on February 16. The forecast for first-quarter real residential investment growth increased from 7.8 percent to 10.8 percent after the housing data releases last week from the National Association of Realtors and the U.S. Census Bureau.
GDP Comments
In regards to the trade deficit report this morning, Econoday commented: “This report will be bringing down early first-quarter GDP estimates.” A reader also commented on the same thing.
I replied to the reader “I agree but the effect is likely not as big effect as you might think. It takes big numbers just to move things s a couple ticks. Even then, it depends on the model. It may have already been anticipated even if economists did not see it.”
That’s what happened.
Economic Reports and Effects on GDPNow
Today’s balance of trade report did not move GDPNow even one tick. I have followed these reports for a long time and unless something is really wild in the trade report, the models barely budge.
However, I will take a shot that the New York Fed Nowcast does move one or two ticks to the downside following the report.
Trump Howling
One thing we can expect from today’s reports is for Trump and his economic advisors led by Peter Navarro, to step up the “unfair” trade charges.
Exports look anemic, especially capital goods exports.
For further discussion, please see:
- Trade Deficit Unexpectedly Widens: Exports Sink, Imports Up Sharply.
- GDP Unexpectedly Undershoots Consensus: What’s Ahead?
Mike “Mish” Shedlock
If I have read your posts right, the GDP figures for Obama’s last quarter will be far less than Trump’s first quarter. Is this a reason for optimism?
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True Federal Government deficit spending is running at $1.3 TRILLION and all we can come up with is pathetic 1.9%-2.4% GDP growth – which is OVERSTATED by an intentionally low-balled deflator.
PATHETIC.
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Much of consumer spending has been fueled by (cash out) refinancing. How is that holding up since Trump Reflation run up in yields?
“The refinance share of mortgage activity decreased to 46.2 percent of total applications, the lowest level since November 2008, from 46.9 percent the previous week.”
https://www.mba.org/2017-press-releases/february/mortgage-applications-decrease-in-latest-mba-weekly-survey-x165735
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cookin deflator 2-3% is low ball,cookin 8-10%(real inflation rate)that’s blatant fraud,of course i would expect nothing less from obammy regime,trump i hope has more class .Lets hope the BS cooked data ended when obama hit the bricks
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Weather.
The unadjusted “raw” numbers for many Winter reports are low compared to rest of the year .. consequently they are adjusted “up” to compensate. In the Mid Atlantic it has been a VERY mild winter in terms of temps and snow. The city near me reported that for January it was the 6th least snowiest since 1900 (around 2 inches or so). I know the West Coast has had a quite a few storms so not sure how that effects. Even so, the weekend before last we were dining / drinking on a patio at a brewery. Packed. Everyone else with the same idea. ..in mid February.
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Utility output likely to be much lower than normal, so the mild winter weather is probably a wash.
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That GDP Now figure was released yesterday and does not include economic reports from today, such as the Trade report. Maybe tomorrows release will show a drop.
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Things are really busy here in Florida. I hope the same is true for the rest of the country.
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Read two interesting reports recently. Firstly that insiders (directors and officers of US corporations) are selling shares at a record rate. Secondly that since interest rates have ticked up, credit issuance has seized up. Clearly the actual players in production are not buying into the Trump rally.
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