In response to poor economic data this week,  both the Atlanta Fed GDPNow Model and the FRBNY Nowcast Model reduced estimates by about 0.3 percentage points.

The wide divergence between models remains at one full percentage point.

GDPNow Forecast: 2.9 percent — June 16, 2017

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2017 is 2.9 percent on June 16, down from 3.2 percent on June 14. The forecast for second-quarter real residential investment growth decreased from 1.8 percent to 0.4 percent after this morning’s housing starts release from the U.S. Census Bureau. The forecast of the contribution of net exports to second-quarter growth declined from -0.23 percentage points to -0.34 percentage points after yesterday’s Import/Export Price Index release from the U.S. Bureau of Labor Statistics.

Nowcast Forecast: 2.9 percent — June 16, 2017

  • The New York Fed Staff Nowcast stands at 1.9% for 2017:Q2 and 1.5% for 2017:Q3.
  • News from this week’s data releases reduced the nowcast for Q2 by 0.4 percentage point and for Q3 by 0.3 percentage point.
  • The decrease in the nowcast was driven mainly by negative surprises from housing and retail sales data that were only partly offset by positive surprises from surveys and manufacturing data.

Divergence One Percentage Point

Both estimates are way too high.

Mike “Mish” Shedlock