Another bad quarter? Atlanta Fed Bank slashes Q3 GDPNow to 1.4%

Well, that escalated quickly.

The Federal Reserve Bank of Atlanta’s GDPNow is one of the most reliable indicators of where the gross domestic product is heading as it emulates the same measurements the Bureau of Economic Analysis (BEA) uses.

It is usually off by a few +/- percentage points. It accurately called the first- and second-quarter GDP prints.

So, financial markets pay attention to what the Atlanta Fed Bank GDPNow model suggests.

Following the recent data from the alphabet agencies and the Institute for Supply Management (ISM), the GDPNow was cut from 2.6% to 1.4% for the third quarter.

Here is what the regional central bank stated:

“After recent releases from the US Census Bureau, the US Bureau of Labor Statistics, the US Bureau of Economic Analysis, and the Institute for Supply Management, the nowcasts of third-quarter real personal consumption expenditures growth, third-quarter real gross private domestic investment growth, and third-quarter real government spending growth decreased from 3.1 percent, -3.5 percent, and 1.7 percent, respectively, to 1.7 percent, -5.8 percent, and 1.3 percent, respectively, while the nowcast of the contribution of the change in real net exports to third-quarter real GDP growth increased from 0.82 percentage points to 1.09 percentage points.”

Of course, this could reverse quickly because last month it went from 1.3% to 2.5% after a couple of releases.

While the U.S. economy is in a technical recession — back to back quarterly negative GDP prints — three consecutive negative quarters of GDP would certainly turn heads.

But the Red Guard cartel — the White House, the mainstream media, and academics — are likely to refrain that the nation is in an economic downturn.

That said, the next month of data will be critical.

The official third-quarter GDP report will not be released until Oct. 27.